[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1780.72]

[Page 1060-1061]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1780--WATER AND WASTE LOANS AND GRANTS--Table of Contents
 
 Subpart C--Planning, Designing, Bidding, Contracting, Constructing and 
                               Inspections
 
Sec. 1780.72  Procurement methods.

    Procurement shall be made by one of the following methods: Small 
purchase procedures; competitive sealed bids (formal advertising); 
competitive negotiation; or noncompetitive negotiation. Competitive 
sealed bids (formal advertising) is the preferred procurement method for 
construction contracts.
    (a) Small purchase procedures. Small purchase procedures are those 
relatively simple and informal procurement methods that are sound and 
appropriate for a procurement of services, supplies or other property, 
costing in the aggregate not more than $100,000. If small purchase 
procedures are used for a procurement, written price or rate quotations 
shall be requested from at least three qualified sources.
    (b) Competitive sealed bids. In competitive sealed bids (formal 
advertising), an invitation for sealed bids is publicly

[[Page 1061]]

advertised and a firm-fixed-price contract (lump sum or unit price) is 
awarded to the responsible bidder whose bid, conforming with all the 
material terms and conditions of the invitation for bids, is lowest, 
price and other factors considered. When using this method the following 
shall apply:
    (1) The invitation for bids shall be publicly advertised at a 
sufficient time prior to the date set for opening of bids. The 
invitation shall comply with the requirements in Sec. 1780.70(d). Bids 
shall be solicited from an adequate number of qualified sources;
    (2) All bids shall be opened publicly at the time and place stated 
in the invitation for bids;
    (3) A firm-fixed-price contract award shall be made by written 
notice to that responsible bidder whose bid, conforming to the 
invitation for bids, is lowest. When specified in the bidding documents, 
factors such as discounts and transportation costs shall be considered 
in determining which bid is lowest; and
    (4) Any or all bids may be rejected by the owner when it is in its 
best interest.
    (c) Competitive negotiation. In competitive negotiations, proposals 
are requested from a number of sources and the Request for Proposal is 
publicized. Negotiations are normally conducted with more than one of 
the sources submitting offers. Competitive negotiation may be used if 
conditions are not appropriate for the use of formal advertising and 
where discussions and bargaining with a view to reaching agreement on 
the technical quality, price, other terms of the proposed contract and 
specifications may be necessary. If competitive negotiation is used for 
a procurement, the following requirements shall apply:
    (1) Proposals shall be solicited from an adequate number of 
qualified sources to permit reasonable competition consistent with the 
nature and requirements of the Procurement. The Request for Proposal 
shall be publicized and reasonable requests by other sources to compete 
shall be honored to the maximum extent practicable;
    (2) The Request for Proposal shall identify all significant 
evaluation factors and their relative importance;
    (3) The owner shall provide mechanisms for technical evaluation of 
the proposals received, determination of responsible offerors for the 
purpose of written or oral discussions, and selection for contract 
award; and
    (4) Award may be made to the responsible offeror whose proposal will 
be most advantageous to the owner. Unsuccessful offerors should be 
promptly notified.
    (d) Noncompetitive negotiation. Noncompetitive negotiation is 
procurement through solicitation of a proposal from only one source, or 
after solicitation of a number of sources, competition is determined 
inadequate. Noncompetitive negotiation may be used when the award of a 
contract is not feasible under small purchase or competitive sealed 
bids. Circumstances under which a contract may be awarded by 
noncompetitive negotiations are limited to the following:
    (1) The item is available only from a single source; or
    (2) There exists a public exigency or emergency and the urgency for 
the requirement will not permit a delay incident to competitive 
solicitation; or
    (3) After solicitation of a number of sources, competition is 
determined inadequate; or
    (4) No acceptable bids have been received after formal advertising; 
or
    (5) The procurement is for professional services; or
    (6) The aggregate amount does not exceed $100,000.