When you're purchasing essential goods and services with federal funds, managing a compliant procurement process is vital.

The Uniform Guidance sets strict standards for high-cost procurements, requiring organizations to use either the Sealed Bid or Proposal method, each with its own set of rules.

In this blog, I’ll guide you through the Proposal method, one of the two formal approaches under the 2024 Uniform Guidance for purchases exceeding the Simplified Acquisition Threshold. You’ll learn the key steps to conduct a compliant Request for Proposal (RFP) process, along with practical tips to streamline your efforts and ensure success.

Brief Overview of the Proposal Method

The proposal method is one of two formal procurement methods allowed under the 2024 Uniform Guidance (200.320) for purchases exceeding your Simplified Acquisition Threshold - currently set at $250,000, though your organization may set lower thresholds.

Unlike sealed bids, where price is the primary factor, the proposal method allows for a more comprehensive evaluation of factors—such as qualifications, technical expertise, and past performance—alongside cost.

Key Steps for a Compliant Proposal Process

To conduct a compliant proposal process, here are the essential requirements and steps you need to follow:

Step 1. Requirements Development

Before issuing a Request for Proposals (RFP), you must develop clear, detailed requirements for the goods or services you’re procuring and make an estimate of what you think they will cost. This step is crucial to setting a solid foundation for procurement and avoiding costly misunderstandings later in the process.

Tip: Engage stakeholders early to ensure your project’s needs are well-defined. Hold a requirements review session to confirm alignment among key team members before issuing the RFP, saving time and minimizing changes later.

Step 2. Evaluation Factors

Your RFP must identify the evaluation factors that will guide your selection process and their relative importance. These factors—such as technical capabilities, experience, qualifications, and price—should align with the needs identified in your requirements.

Tip: Weight your evaluation factors based on their impact on project success. For instance, prioritize technical expertise over price if it's critical to the project.

Step 3. Public Solicitation: Once the RFP is ready, it must be publicized to ensure transparency and competition. You must also consider all responses to the solicitation to the extent practicable.

Tip: Maintain documentary evidence that the RFP was publicized, as auditors will want to see proof.

Step 4. Adequate Competition

You must solicit proposals from multiple qualified vendors. The Uniform Guidance does not specify what ‘multiple’ means, so it's up to you to make that determination.

Tip: If response rates are low, consider extending the deadline or directly contacting potential vendors to gauge their interest.

Step 5. Evaluation Procedures

Once proposals are received, you must follow written procedures for evaluating them. Your procedures should clearly define how proposals will be scored based on the evaluation factors in the RFP. Consistency in this process is key to ensuring fairness and compliance.

Tip: Consider using a scoring matrix to rank proposals against the evaluation factors. This simplifies the comparison and provides a clear audit trail.

Step 6. Cost or Price Analysis

As part of your evaluation process, you must conduct a cost or price analysis to ensure the proposed contract price is reasonable given the project’s scope and complexity. This process should be thoroughly documented.

Tip: You are also required to develop and document an independent cost estimate before conducting your solicitation. It serves as a baseline for your cost or price analysis.

Step 7. Awarding the Contract

The final step is awarding the contract to the best-fit vendor, using either a fixed price or cost reimbursement contract. The award should be based on the best overall value—this may not necessarily be the lowest-priced proposal, but the one that best meets your project’s needs.

Tip: Document your decision-making process, including the procurement method you used, your rationale for selecting the winning proposal and the type of contract awarded. This ensures compliance with documentation requirements and protects you in the event of an audit or challenge.

Final Thoughts

In addition to following proposal requirements, you also need to ensure you comply with general procurement standards (§200.318), competition standards (§200.319), and other relevant requirements. These include requirements like avoiding conflicts of interest and conducting due diligence to ensure you are working with a 'responsible contractor'. All procurement standards need to be documented in your organization's policies to provide clarity and ensure consistent application.

We Take the Headaches Out of Proposal Management

We offer a variety of support options, including full-service RFP management. We can handle all of the details so you can focus on choosing the best solution and vendor.