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Competitive Bidding, RFQ, RFP, ITB, IFT Process & Procedures

Competitive Process, Set-Aside & Procedures

1.0  Purpose

This guide outlines procurement procedures for purchasing all goods and services by AGGRECOST™ (the Company). Its intent is to provide step by step instructions on how to execute the Company’s competitive bidding process.

2.0  Accountable Department

The Estimating & Costing Division is responsible for the implementation of the Company’s purchasing activities in an effective and efficient manner.

3.0  Estimating & Costing Division Review

If the purchase price of goods or services exceeds the Company’s bidding threshold of Twenty-Five Thousand Dollars $25,000, the Initiator must follow the following process:

  1. Review Process
  1. A Request for Proposal (RFP) or Request for Quote (RFQ) must be sent to no less than three (3) prequalified vendors.
  2. All responses to the RFP/RFQ process must be logged and archived.
  3. Prepare a Recommendation to Award (RTA) that identifies the selected vendor and reasons for its selection.
  4. In the event competitive bidding is deemed inappropriate, prepare Sole Source Justification Document (SSJD).
  5. Either (i) confirm Vendor’s Certificate of Insurance (COI) complies with the Company’s guidelines, or (ii) secure a waiver from the Company’s Risk Management Office.
  6. Prepare Report of Good Faith Effort (RGFE) and Invitation Response Report (IRR).
  7. Ensure sufficient time has been allocated for RFP/RFQ solicitation process.
  8. Ensure sufficient time has been allocated for RFP/RFQ response and review.

3.1 Using Sole Source Justification

If the Initiator and the Estimating & Costing Division are unable to identify at least three suppliers capable of providing the good or service, the purchase may be completed using a sole source justification.  The Estimating & Costing Division shall be consulted whenever a sole source purchase is being considered to support negotiating price and/or terms and conditions.  

(a) Sole Source

If the good or service is unique or proprietary, or if a supplier has an exclusive right or territorial agency and will not meet the criteria for competition, the purchase may be completed by requesting a sole source waiver to management or authority agent in charge.

Example: The need for a sole source supplier usually arises when the good or service is unique (e.g., specialized and unique equipment, specialized services, patented materials or techniques). 

In this case, Explanation for Sole Source must be completed and submitted along with a purchase requisition for the good or service and other supporting pricing documentation, such as a valid quote and or pricing/bid schedule for the specific amount of time that the purchase period will be active.

3.2 Requesting Competitive Bids and Quotes

For goods or services in excess of the Company’s $25,000.00 competitive bidding threshold, at least three written bids must be requested, reviewed, and included as part of the purchasing transaction record.

3.3 Prepare a Request for Proposal or Request for Quote 

The initiator, where appropriate, must develop a Request for Proposal (RFP), Request for Quotations (RFQ), or Request for Information (RFI), to solicit bids from potential suppliers.  The difference between RFPs and RFQs is explained below. AGGRECOST™ Estimating & Costing Division is available to assist departments and project managers in selecting, completing, and reviewing the most appropriate method.   

  1. Select the RFP, RFQ or RFI Method
  1. Request for Proposal (RFP) – RFPs should be used when the department’s business needs could be met in multiple ways, the ultimate product or quantity is uncertain, or the scope of work could change.  RFPs allow competing suppliers to describe their proposed methodologies or processes for meeting AGGRECOST™ needs in addition to their pricing information.  In general, most purchases of services should use an RFP to request competitive bids.    
  2. Request for Quotations (RFQ) – RFQs should be used if a purchase has clearly defined parameters and the scope of work is unlikely to change.  RFQs provide clear specifications for the desired good or service and do not generally request information on the suppliers’ processes or methodologies.  RFQs are most appropriate when the good or service is standardized, and suppliers’ products or services are very similar.   
  3. Request for Information (RFI) – RFI’s are used when a good or service has been identified but more information from suppliers is needed to assist the decision-making process and identify next steps.  RFI’s are seldom the final stage of a procurement process and are often used prior to and in combination with either an

RFQ or RFP.  RFIs clearly indicate that an award of a contract will not automatically follow and is not an offer by AGGRECOST™ to enter an agreement with any supplier.

3.4 Obtain Bids or Quotes from Suppliers

The Initiator must confirm that he or she understands the following guidelines for establishing a fair competition when requesting formal bids or quotes from suppliers in order to ensure that each supplier or contractor has an equal chance in the competition. AGGRECOST™ Estimating & Costing Division is available to assist departments and project managers in the bid or quote solicitation process.

  1. Send RFP/RFQ to Suppliers
  1. The initiator must send the RFP/RFQ to at least three qualified suppliers.  Each RFP/RFQ must be identical and sent to each supplier at the same time to ensure a fair competition.  

Note:  At any time prior to the established due date, (unless otherwise stated in the Invitation To Bid) contractors and suppliers may submit questions on the RFP/RFQ to AGGRECOST™.  All supplier/contractor questions and the subsequent AGGRECOST™ answers must be provided to each of the competing suppliers/contractors in writing and at the same time.

  1. Receive Bids or Quotes
  1. Supplier proposals or quotations may be received by: U.S. mail; fax; e-mail; overnight mail; hand delivery; and electronic bidding system (bylt™).  Bids or quotes received by the Estimating & Costing Division will be forwarded to the appropriate Buyer for review and analysis.  As soon as a bid or quote is received, it should be stored in a secure area.  Bids or quotes must not be shared with any person unless he or she is participating in the decision-making process.
  1. Bids or quotes submitted to AGGRECOST™ are strictly confidential and under no circumstances should suppliers/contractors be given information about bids or quotes from competing sources.
  1. Confirm Bids or Quotes Are Complete
  1. The Initiator should review all received supplier/contractor’s proposals or quotations to ensure that they are complete. AGGRECOST™ may choose not to consider incomplete or late submissions to preserve the fairness of the competition.  The following information should be included in each bid or quote:  
  2. Clear and accurate description, including specifications, for the product or service
  3. Net cost of the product or service, the cost broken down by components or work phase (cont’d)
  4. Other related costs (e.g., surcharges, maintenance, material, labor, handling fees, expenses, shipping, and/or installation costs)
  5. Delivery or project schedule (include date and time as appropriate)
  6. Payment terms

Note:  AGGRECOST™ standard payment terms are Net 30, meaning that AGGRECOST™ will pay properly authorized invoices within 30 days of the supplier/contractor invoice date or AIA certificate of payment upon sign off.

  1. Environmental specifications of the product or service including, but not limited to, product life cycle analysis, raw materials and energy costs of product manufacturing and delivery, recycled content and recyclables of the product, any possible health concerns regarding its use and disposal (e.g., toxicity of materials or ingredients), and possible end-of-life product recovery by its company
  2. Warranty and other data as applicable.
  3. Professional Services and Consulting Agreement terms and conditions, if applicable.

4.0  Analyzing Bids or Quotes and Selecting Suppliers

A thorough analysis of each bid or quote received is required prior to selecting the final supplier.  Therefore, the Initiator must read each bid or quote carefully and consider the guidelines stated in this section to ensure that AGGRECOST™ resources are used effectively.  The Estimating & Costing Division is available to assist with the analysis as requested.

4.1 Analyze the Bids or Quotes

(a) In general, the Initiator should consider the following key questions when reviewing bids or quotes:  

  1. Does the supplier/contractor provide the best mix of quality, service, material, and price for the specified need?
    • Note:  Federal Or State agency regulations may require primary consideration of the lowest price from a qualified supplier whose bid was received by the bid closing date unless quality, service, or delivery time takes priority based on documented need.
  2. Does the supplier have the financial stability, size, and service infrastructure to effectively meet AGGRECOST™ needs?
  3. Will the proposed delivery schedule meet the departments “need-by” date?
  4. Are the product’s quality and supplier’s performance reputation acceptable in the context of AGGRECOST™ use?
  5. Will the supplier satisfy all requirements of the sponsored award, if applicable?
    • Note:Be aware of applicable Federal or other State sponsored program regulations regarding purchases funded by grants or contracts, including those regarding debarred or suspended suppliers/contractors.
  6. Do the supplier’s proposed terms and conditions and stated insurance level deviate substantially from AGGRECOST™ requirement?
    • Note:Analysis of supplier terms and conditions or insurance levels may be complex. It is strongly recommended that the Initiator request assistance from the Estimating & Costing Division in reviewing this information or legal dept.
  7. Does the supplier/contractor qualify as a diversity supplier or otherwise support AGGRECOST™ initiatives and requirements?
  8. Do the supplier’s or contractor’s business practices and products support AGGRECOST™ environmental sustainability initiatives?
  9. Does the supplier/contractor meet safety goals/requirements and history of safe practice? i.e OSHA or Workman’s Comp ratings.
  10. Request New Bids or Quotes, if Necessary
  1. If the initiator determines that none of the received bids or quotes can meet the department’s business needs, based on the results of the bid or quote analysis, a new RFP or RFQ may be issued.  It is strongly recommended that the department contact the Estimating & Costing Department for assistance prior to initiating a new bidding process.      
  2. If a new RFP or RFQ is issued, the Initiator must ensure that all suppliers / contractors who have submitted bids or quotes for the original RFP or RFQ are notified and have an equal chance to submit another bid or quote.
  1.   Select a Supplier

(a) Negotiate with Suppliers

  1. Based on the results of the bid or quote analysis, the Initiator must identify the supplier(s) that appear best able to meet the department’s business needs.  The Initiator may then begin discussions with suppliers / contractors to ask any questions and clarify any details regarding the bid or quote.  During these discussions, it is appropriate to negotiate any required or desired price, performance, or terms and conditions improvements.

Note:  It is not permissible to discuss the specifics of competing bids with suppliers or any AGGRECOST™ employee outside of the negotiation team; such information is confidential.

  1. Prior to negotiations, the initiator shall: 
  1. Contact the Director Of Construction to request assistance in establishing an appropriate negotiation team
  2. Consider and decide on negotiation points, positions, and possibilities for supplier / contractor concessions; and
  3. Establish an appropriate time frame to negotiate and make the purchase decision. 

(c) Make the Supplier or Contractor Selection

  1. Once negotiations are complete, the department must determine which supplier will provide the best overall product or service based on the established business needs and results of the bid or quote analysis. 

5.0 Documenting & Reporting

AGGRECOST™ utilizes contractor databases and software to maintain overall communication and contractor outreach. In addition, Company software and data storage systems maintain reports, communications and demographics related to our process. Below is a list of maintained documentation kept, reviewed, and archived:

  • Public Notification & Outreach Method Used And Publication Proof
  • Archives of The Invitation To Bid
  • Copies of Contractor Compliance Acknowledgement and Terms (Signatures Kept)
  • Contractor Invite Report (Reports of total invited and responses)
  • Contractor Type & or Diversity Certification Report Breakdown (By Certification)
  • Contractor RFI, Addenda, & Responses
  • Bid Tabs, Scopes Of Work, Bid Schedules and associated responses.

Please see the Templates Package for communication templates grouped by State.

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