Why the Lowest Bidders Aren't Always Awarded | FAMR (2024)

Winning a government contract can be incredibly valuable for your business. It brings in stable revenue, establishes your reputation as a reliable provider, and opens doors to future opportunities. But for many companies new to the process, a crucial question arises — isn’t it just about being the lowest bidder? While cost is certainly a factor, government procurement is far more strategic and nuanced.

Responsive vs. responsible bidder

Government agencies are tasked with spending taxpayer dollars efficiently. This means they not only have to find the most affordable solution, but also ensure that the chosen contractor can deliver quality work on time and within budget. This is where responsive and responsible bidders come in:

Responsive bidder

These are companies that have met all the mandatory requirements outlined in the Request for Proposal (RFP). That includes submitting the proposal on time, adhering to the specified format, and providing all the requested documentation (licenses, insurance certificates, etc.). Think of it as passing the initial eligibility check. Any missed documents or deviations from the format will categorize this as a non-responsive bid, which could disqualify your bid from further consideration — no matter how competitive your price is. This is why, even if someone has the lowest bid, they might not win the contract if their bid is non-responsive.

Responsible bidder

A responsible bidder goes beyond simply meeting the minimum requirements. The agency evaluates qualifications, experience, past performance on similar projects, and financial stability. This can also include a company’s relationships and reputation in the industry or community. Essentially, they’re looking for a company with a proven track record and the resources to successfully complete the project, mitigate potential risks, and deliver a positive result.

Lowest Responsive & Responsible Vendor

The “lowest responsive and responsible vendor” is therefore the company that offers the best overall value to the government. Now we know that this may not always be the one with the absolute lowest price. A slightly higher bid can be outweighed by a company’s responsiveness or better “responsible” assessment. This is why it’s critical to your bid’s success to look for contracts where you are considered a responsible vendor, and submit documentation in a manner that makes you a responsive vendor as well.

Other bid factors

There are a number of other elements that government agencies will often take into account (some as part of their “responsible” assessment, and others beyond this):

Past performance

Your history on past government contracts carries significant weight. A proven track record of completing similar projects on time and within budget (preferably with positive performance evaluations from previous government clients) strengthens your bid significantly. For those new to government contracting, focus on highlighting relevant experience from the private sector to emphasize your work history.

Registration status

Make sure your company is registered in all necessary databases (like the System for Award Management) and has the required licenses and permits for the specific project you’re bidding on. Failing these steps will likely disqualify you from consideration immediately — so don’t underestimate the importance of administrative preparedness.

Marketing

Another important piece of the puzzle is a clear, well-written proposal that effectively communicates your value proposition. Don’t cut corners in creating a compelling document that highlights your strengths and speaks directly to the specific needs of the project. Use clear, concise language, avoid technical jargon, and tailor your content to address the agency’s evaluation criteria. Marketing documents and considerations include:

• Strong Online Presence: Have a professional, informative, and mobile-friendly website that highlights your experience and certifications.
• Capability Statement: Summarize your company’s expertise, experience, and qualifications relevant to government contracting.
• Targeted Marketing Efforts: Research the specific agencies issuing RFPs aligned with your company’s strengths and attend industry events and conferences to network with contracting officials and prime contractors.
• Optimized DSBS Profile: The SBA’s Dynamic Small Business Search (DSBS) is designed to connect agencies with businesses, so make sure that your profile includes details about your capabilities, work history, points of contact, etc.

Set-asides

Government programs also often set aside a percentage of contracts specifically for businesses who might not be able to compete on an even playing field with bigger corporations like Lockheed Martin, AT&T, and Deloitte. These are additional situations where the lowest bidder might not win the contract.

• Small Business Set-Asides: A significant portion of government contracts are reserved just for small businesses, defined as those meeting size standards set by the Small Business Administration.
• Veteran-Owned Business Set-Asides: Programs like Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Veteran-Owned Small Businesses (VOSBs) are in place to designate a share of contracts to these companies.
• Women-Owned Small Business Set-Asides: Similar to the VOSB set-aside, the WOSB program exists to encourage participation from women-owned businesses.
• HUBZone Set-Asides: This supports businesses located in economically underutilized areas of the country, giving companies in these regions access to a specific pool of government contracts.

Strengthen your contracting presence

Remember, government contracting is a competitive landscape. By understanding the nuances of the evaluation process and focusing on becoming a responsible bidder, you’ll be better equipped to win contracts, even if your price tag isn’t the lowest. It’s also important to build a long-term relationship with the government, becoming a go-to and trusted provider, and fostering sustainable growth for your business.

The government contracting process can seem daunting, but it doesn’t have to be. We help businesses of all sizes navigate the complexities of government contracting. Whether it’s starting your SAM registration, looking for your first contract, or strengthening your marketing strategy for future contracts, we partner with companies across a variety of industries. Contact our team or call us today to get started!