Under 45 CFR Part 92.36, the sealed bid method is the preferred method for procuring construction, when feasible. A properly executed bid and contract award process involves the following steps:

• Preparing an invitation for bids, describing the building design and specifications clearly, accurately, and completely by avoiding unclearly restrictive specifications or requirements.
• Publicizing the invitation for bids in a newspaper of general circulation or other means as appropriate to ensure distribution to prospective bidders in sufficient time to enable them to prepare and submit bids.
• Holding a pre-bid conference (if applicable), which is called by the architect to include representatives of the grantee in which any prospective contractor may attend (in some instances, attendance is mandatory in order for the contractor to submit a bid), review the details of the project, question and clarify any construction issues, and obtain a general understanding of the job.
• Conducting a public bid opening, including adequate documentation of the proceedings (i.e., certified bid tabulation by the architect, minutes of the opening).
• Preparing to award the contract to the responsible bidder whose bid contains the lowest price offer and conforms to the requirements of the invitation for bids and all prescribed documents, bonds, and assurances. After the bids are publicly opened (which does not constitute an award or an intended contract), the architect or the grantee determines if the low bidder is on the U.S. General Services Administration List of Parties Excluded from Federal Procurement or Non-Procurement programs (Debarred List). The references, bank statements, or other forms of information should also be checked to determine the stability and business worthiness of the contractor.
• The Construction Contract is signed after a review of the bids, a recommendation from the architect and/or the grantee, and approval by the governing body or the authorized council or representatives or entity to award the construction contract.
• A Notice to Proceed can then be written and issued to the contractor indicating the date construction may commence, the number of days of the construction contract period, and the date construction will be substantially complete.

Mistakes to Avoid in the Bidding Process:

• During the bidding process, announce the time and date of the bid opening and the cut-off point for accepting bids. This cut-off point must be enforced. If an agency opens a late bid, there could be a lawsuit, legal action against the agency, and delays in the project. If a contractor that misses the cut-off time for accepting bids delivers a bid, the agency may take the bid but may not open it. The bid should be listed on the Bid Tabulation Sheet as "rejected" because it was not submitted before the cut-off.
• Once the bids have been opened and read aloud by the architect or the project manager, nothing else should be said, particularly about the lowest bidder. After last bid is read, those who attended should be thanked and told the date that an award might be made, such as the next board meeting.
• Once all the bids have been accepted, the project team may begin to determine the ability of contractors to do the work for which they submitted a bid. This includes checking references, bank information, credit ratings, lawsuits, stability in top management, subcontractors, suppliers, bond ratings, and determining if the contractor is on the government's list of debarred contractors, which would preclude a contract or subcontract award.

Refer to the Tip Sheet on the Bidding Process for more information.