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Public Contracting 101

Most contracts must be awarded through a competitive process of some sort. However, relatively few contracts are awarded through a traditional, closed-envelope, competitive bidding process. The need for efficiency and cost savings for repeat purchases or for unique procurements that are best suited to fit an agency’s needs have generated a number of alternative, but still competitive, processes for contracting.

RFPs, CSPs, RFQs and other Acronyms State and local governments use several forms of procurement processes that allow the agency to select from a menu of vendor options or obtain proposals for a tailored solution to meet their needs. “Competitive bidding” generally refers to a strict procedure of accepting formal bids and awarding contracts pursuant to an objective process. For example, R.C. 9.312 requires state agencies to award contracts to the lowest responsive and responsible bidders. Other sections throughout the Revised Code or in local ordinances provide for competitive bidding processes for other political subdivisions.

Other provisions in the law provide for a procurement process that is competitive, but less rigid than the traditional competitive bidding. For example, R.C. 125.071 provides for a process of competitive proposals when the Director of the Department of Administrative Services determines that a competitive sealed bidding process is not possible or advantageous to the state. A competitive proposal process still provides for a fair and competitive process, but allows the awarding agency slightly more discretion when choosing a vendor than the agency might normally have with traditional competitive bidding.

Some political subdivisions have authority within the Ohio Revised Code or within their own specific ordinances to undertake a process similar to competitive sealed proposals. Many state agencies and political subdivisions use a request for proposals process (“RFP”), which provides even more discretion to the state agency to choose a particular vendor or menu of services to best suit the agency’s needs. State and local laws also permit agencies to make emergency or direct purchases without bidding under limited circumstances.

Under each process, it is important to know the underlying legal authority and limitations on the process. Even with procurement processes where the awarding agency is provided the greatest deal of discretion in choosing a vendor, most contracting documents carefully spell out the criterion for awarding a contract and require that a fair and competitive process be used. Most such contracting documents also contain a procedure for asking questions and seeking clarification, as well as processes for challenging a bid award or negotiating for changes once the contract is let.

Finally, the state and political subdivisions can also engage in alternative methods of procurement, such as state term schedules and the cooperative purchasing program, which meet competitive bidding requirements without a competitive process for each individual procurement. Read more about these blanket contracts. More and more government entities are also turning to reverse internet auctions for their procurement needs. Reverse auctions are discussed in Reverse Internet Auctions -- A Better Way to Buy?

For more information or assistance, please contact Maria J. Armstrong or any member of the Government Relations group.