Competitive bidding is a formal process that may also be referred to as competitive sealed bidding, sealed bidding or formal bidding. It is an option available to school districts for the procurement of goods and services. The purpose of competitive bidding is to stimulate competition and obtain the lowest practical price for the work, service and/or item(s) needed. The competitive bidding process requires that bids be evaluated and awards made based solely upon bid specifications, terms and conditions contained in the request for bids document, and according to the bid prices offered by vendors and pertinent factors that may affect contract performance.
State law requires that the purchase, lease or lease-purchase of a school bus must be competitively bid when the contract is valued at $20,000 or more (Texas Education Code §44.031(l)).
HB 2411 passed by the 80th Legislature allows for competitive sealed proposals as an alternate procurement method to competitive bidding for bank depository services.
The advertisement for bids, description in the request for bids of item(s), work and/or services and specific terms and conditions must be done in a manner that stimulates competition and obtains the lowest practical price. A request for bids contains the following elements:
• Purchase description or specifications covering the item(s) to be obtained
• Work and/or services needed
• Terms and conditions for the proposed bid contract
• Time and place for opening bids and other provision
The bid process itself should be structured and incorporated into school district purchasing procedures. This process should involve:
• Development of clear specifications
• Advertising for competitive bids
• Responding to vendor questions
• Procedures for opening and tabulating the bids
• Analysis of the bids to ensure compliance with requirements
• Recommending the vendor(s) for bid award
• Award of the bid by the board
Because competitive bidding is one of the most complicated areas of purchasing, a separate section of this module is devoted to this purchasing method.