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Formal Procurement (>$250,000 OR most restrictive threshold)
- The federal small purchase threshold (Simplified Acquisition Threshold) is $250,000; however, your district/LEA may have a more restrictive threshold. If so, the most restrictive threshold must be followed.
- A cost or price analysis must always be conducted prior to soliciting goods or services where the value exceeds the small purchase threshold.
- Formal solicitations must include certain language, including:
- Requirements regarding the Buy American Provision
- 2 CFR 200 Appendix II clauses, as applicable.
- Formal Procurement Checklist (PDF)
There are two types of formal solicitations: Invitation for Bid (IFB) and Request for Proposals (RFP):
Invitation for Bid (sealed bid)
- Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid:
- conforms with all the material terms and conditions of the invitation for bids, and
- Is the lowest price
- In order for sealed bidding to be feasible, the following conditions should be present:
- A complete, adequate, and realistic specification or purchase description is available;
- Two or more responsible bidders are willing and able to compete effectively for the business; and
- The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.
- Bids must be solicited from an adequate number of known suppliers, provide sufficient response time prior to the date set for opening bids, and publicly advertised.
- Bids are opened publicly at the location, date, and time prescribed in the IFB.
- Any or all bids may be rejected if there is a sound documented reason.
- Factors such as discounts, transportations cost, and lifecycle costs must be considered in determining which bid is lowest, and must be included in the firm, fixed price contract.
Request for Proposals (competitive proposal)
- Competitive proposals are used when conditions are not appropriate for sealed bids.
- Proposals must be solicited from an adequate number of qualified sources; proposals cannot be opened until after the closing date and time specified in the RFP. Public opening is optional.
- The contract is awarded to the responsible and responsive vendor whose proposal scored the highest number of points, and is most advantageous to the program with price and other factors considered.
- Cost does not have to be 51% of points, but must be the highest weighted criteria.
- SFA must have a written method for conducting technical evaluations of the proposals and for selecting the award.
- RFP should contain the criteria for which the proposals will be scored (a scoring rubric is encouraged).
- A firm fixed price or cost reimbursable contract may be awarded (cost plus percentage contracts are NOT allowable).
- For formal procurement, the solicitation, all responses, scoring of proposals, and final contract (with and amendments) must be kept as documentation.