14.404-2 Rejection of individual bids
Source: FAR 14.404-2 on acquisition.gov
Bids that fail to strictly comply with essential IFB requirements or introduce unauthorized conditions must be rejected to ensure fairness and integrity in government procurement.
Overview
FAR 14.404-2 outlines the specific circumstances under which individual bids must or may be rejected during the sealed bidding process. The regulation ensures that only bids fully compliant with the invitation for bids (IFB) requirements are considered, protecting the integrity and fairness of the procurement process. It details mandatory rejection criteria (such as nonconformance with essential requirements, specifications, delivery schedules, or bid guarantees) and discretionary grounds (such as unreasonably high prices or materially unbalanced pricing). The section also addresses the handling of bids from suspended or debarred entities, non-responsible bidders, and the procedural requirements for preserving rejected bids and related documentation.
Key Rules
- Mandatory Rejection for Nonconformance
- Bids not meeting essential requirements, specifications, or delivery schedules must be rejected unless alternates are authorized and compliant.
- Conditional or Qualified Bids
- Bids imposing unauthorized conditions or limiting government rights/liability must be rejected to ensure fairness.
- Correction of Non-Substantive Conditions
- Low bidders may be allowed to remove non-substantive, non-prejudicial conditions from their bids.
- Price Reasonableness and Balance
- Bids may be rejected if prices are unreasonable or materially unbalanced across line items.
- Suspended, Debarred, or Non-Responsible Bidders
- Bids from such entities must be rejected unless exceptions apply.
- Bid Guarantee Requirements
- Failure to provide a required bid guarantee results in rejection, with limited exceptions.
- Asset Transfers
- Bids are rejected if the bidder’s assets are transferred post-bid, except in specific legal circumstances.
- Recordkeeping
- Originals of rejected bids and findings must be preserved with acquisition records.
Responsibilities
- Contracting Officers: Must rigorously evaluate bids for compliance, document and preserve rejected bids, and ensure fairness in the process.
- Contractors: Must submit bids that fully comply with all IFB requirements, avoid unauthorized conditions, and provide required guarantees.
- Agencies: Oversee adherence to rejection criteria and maintain proper records for audit and review.
Practical Implications
- This section exists to maintain the integrity and fairness of the sealed bidding process by ensuring only compliant bids are considered.
- Contractors must pay close attention to all IFB requirements and avoid adding conditions or failing to provide required documentation.
- Common pitfalls include submitting conditional bids, omitting bid guarantees, or failing to meet delivery or specification requirements, all of which can lead to automatic rejection.
(a) Any bid that fails to conform to the essential requirements of the invitation for bids shall be rejected.
(b) Any bid that does not conform to the applicable specifications shall be rejected unless the invitation authorized the submission of alternate bids and the supplies offered as alternates meet the requirements specified in the invitation.
(c) Any bid that fails to conform to the delivery schedule or permissible alternates stated in the invitation shall be rejected.
(d) A bid shall be rejected when the bidder imposes conditions that would modify requirements of the invitation or limit the bidder’s liability to the Government, since to allow the bidder to impose such conditions would be prejudicial to other bidders. For example, bids shall be rejected in which the bidder-
(1) Protects against future changes in conditions, such as increased costs, if total possible costs to the Government cannot be determined;
(2) Fails to state a price and indicates that price shall be "price in effect at time of delivery;"
(3) States a price but qualifies it as being subject to "price in effect at time of delivery;"
(4) When not authorized by the invitation, conditions or qualifies a bid by stipulating that it is to be considered only if, before date of award, the bidder receives (or does not receive) award under a separate solicitation;
(5) Requires that the Government is to determine that the bidder’s product meets applicable Government specifications; or
(6) Limits rights of the Government under any contract clause.
(e) A low bidder may be requested to delete objectionable conditions from a bid provided the conditions do not go to the substance, as distinguished from the form, of the bid, or work an injustice on other bidders. A condition goes to the substance of a bid where it affects price, quantity, quality, or delivery of the items offered.
(f) Any bid may be rejected if the contracting officer determines in writing that it is unreasonable as to price. Unreasonableness of price includes not only the total price of the bid, but the prices for individual line items as well.
(g) Any bid may be rejected if the prices for any line items or subline items are materially unbalanced (see 15.404-1(g)).
(h) Bids received from any person or concern that is suspended, debarred, proposed for debarment or declared ineligible as of the bid opening date shall be rejected unless a compelling reason determination is made (see subpart 9.4).
(i) Low bids received from concerns determined to be not responsible pursuant to subpart 9.1 shall be rejected (but if a bidder is a small business concern, see19.6 with respect to certificates of competency).
(j) When a bid guarantee is required and a bidder fails to furnish the guarantee in accordance with the requirements of the invitation for bids, the bid shall be rejected, except as otherwise provided in 28.101-4.
(k) The originals of all rejected bids, and any written findings with respect to such rejections, shall be preserved with the papers relating to the acquisition.
(l) After submitting a bid, if all of a bidder’s assets or that part related to the bid are transferred during the period between the bid opening and the award, the transferee may not be able to take over the bid. Accordingly, the contracting officer shall reject the bid unless the transfer is effected by merger, operation of law, or other means not barred by http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section6305&num=0&edition=prelim" target="_blank">41 U.S.C.6305 or http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section3727&num=0&edition=prelim" target="_blank">31 U.S.C. 3727.