Introduction to Procurement for Public Housing Authorities Sealed Bids Unit 5

Learning Objectives Understand when to use the sealed bid method of procurement Understand the basic process and requirements for awarding contracts under the sealed bid method Define responsive and responsible bidders 2

3 Sealed Bidding Used mostly for construction contracts and the purchase of commodities (e.g., equipment and supplies) Used when the cost estimate is more than the $100,000 Federal simplified acquisition threshold or the limit specified in the PHA’s Procurement Policy Dependent upon good specifications Two or more bidders willing in the open market Can award on the basis of price Can award a fixed-price contract

The Sealed Bid Process… 4 Advertise Invitation for Bid Open Bids Publicly Determine responsive and responsible bidder with the lowest bid Execute fixed-price Contract (attach forms) Manage Contract …5 Basic Steps

Invitation for Bid (IFB) Develop a Statement of Work (SOW) Develop/reassess Independent Cost Estimate (ICE) Determine if Plans & Specifications (P/S) are needed ▫Hire an Architecture & Engineering firm using applicable procurement method Draft final P/S and obtain Wage Rates, as applicable Finalize bid documents 5

IFB (cont.) Publicly advertise for bids ▫Local newspapers, trade periodicals, etc. ▫Mail advertisement to potential bidders Hold a pre-bid conference to discuss IFB, if necessary ▫Attendance is desirable but not mandatory ▫Issue addenda to clarify significant issues Receipt of bids ▫Time-date stamp all bids received ▫Secure in a private place Publicly open bids received on due date ▫Official reads name of bidder and cost of bid and records in official Bid Tabulation ▫Do not discuss results or intentions to award 6

IFB (cont.) Analyze bids received to satisfy responsiveness requirement ▫Verify that all required documents in the IFB have been provided, including the bid bond submittal Complete a Price (or Cost) Analysis of bids received against each other if competitive, or by using other sources and the ICE Verify potentially successful contractor’s responsibility before contract award Write justification and/or recommendation letter to the file selecting successful entity Notify unsuccessful bidders If required, obtain PHA Board’s approval 7

A bidder or offeror which submits a reply or bid which conforms to the material terms and conditions of the solicitation The PHA’s Contracting Officer must assess the responsiveness by ensuring that all required documents were provided (e.g., bid bond) as noted in the solicitation or request Makes bidders or offerors to a solicitation eligible entities to be considered for award! Per §85.36(d)(2)(ii)(D) PHA’s shall award contracts to the lowest responsive bidder 8 Responsive Bidders

A bidder/offeror that has the ability to perform successfully under the terms and conditions of the proposed contract/agreement ▫ Per §85.36(d)(2)(ii)(D), PHAs shall award contracts to the lowest responsible bidders In determining responsibility, the PHA’s Contracting Officer shall consider the bidder’s ▫ Satisfactory record of integrity & business ethics ▫ Compliance with public policy ▫ Performance record & experience ▫ Financial & technical resources 9 Responsible Contractors

IFB – final steps Notify selected contractor of intent to award contract Contract agreement is executed by the parties Conduct a pre-construction conference Obtain insurance documents, Performance and Payment Bonds, etc. Issue the Notice to Proceed ▫Outlines start/completion timeframes Manage the contract per administrative procedures in place at the PHA! 10

Administration Modifications and withdrawal by bidder are allowed before the bid opening. Bids must be opened on scheduled date, time and place. ▫Any postponement must be issued via an official addendum mailed with sufficient time (7 days) Any issues brought forth in the bid opening are taken under advisement only…no opinions given! Generally, no withdrawals allowed after bid opening unless an obvious error is evident. 11

Administration (cont.) Corrections are allowed after bid opening, if justified. If deductive alternates are used, you have to take them in a specific order as outlined in the bid documents. ▫Inverse priority order - the less important, less costly items are selected first Cannot pre-price future work. ▫E.g., PHAs shall not bid base work and include options to add additional work Cannot negotiate price! 12

13 Required Forms for Sealed Bids Attachments to solicitations (i.e., IFB) :  HUD-5369, Instructions to Bidders for Contracts  HUD-5369-A, Representations, Certifications, and Other Statements of Bidders  HUD-5369-B, Instructions to Offerors Non- Construction  HUD-5369-C, Certifications and Representations of Offerors Non-Construction Contract  Any applicable wage determinations

Required Forms for Sealed Bids (cont.) Attachments to contract or agreement : HUD-5370, General Conditions for Construction Contracts HUD-5370-C, General Conditions for Non- Construction Contracts (either Section I or both Sections I & II) Any applicable wage determinations 14

Remember… Use when cost estimate above $100,000 Federal Simplified Acquisition threshold (or PHA’s limit) Open on scheduled date, time and place Award based on price Award to responsive and responsible bidders Cannot negotiate price ICE required Price/Cost Analysis required 15

References and Resources 24 CFR 85.36(d)(2) PHA Procurement Handbook REV 2 - Chapter 6 For applicable wage rates, visit the Department of Labor at For a list of acceptable sureties, visit the Department of Treasury’s Financial Management Service at For HUD’s Limited Denial of Participation List, visit