5.2PROCUREMENT METHODOLOGY
5.201 Private Sector Options. Private sector entities have an unlimited array of options for the procurement of construction services. As a practical matter, the market or market conditions often dictate procurement methodology. While it may be desirable to solicit multiple competing proposals to achieve competitive pricing, this approach may be impractical if an
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owner is procuring highly specialized services or is soliciting proposals during a period of particularly high demand for qualified construction services. Unlike a public sector entity, a private owner may freely elect to proceed with a sole-source procurement, may exclude organizations it does not care for, or create its own procurement approach. Public entities, and in some circumstances, private entities using public funds, however, must abide by procurement policies imposed by applicable state and federal law.
5.202 Procurement Methods Under the Virginia Public Procurement Act.
A. In General. In much the same manner as the Federal Acquisition Regulation 2 standardizes most aspects of federal government contracting, the Virginia Public Procurement Act 3 (the "Act") provides an extensive set of requirements and policies governing state and local procurement within the Commonwealth. The stated intent of the Act is to "enunciate the public policies pertaining to governmental procurement from nongovernmental sources." 4 To that end, the Act provides public bodies with accepted methods of procuring "high quality goods and services at reasonable cost" while also promoting the fairness, impartiality, and transparency of the process. 5 Unlike evolving federal standards, Virginia generally continues to prohibit "best value" procurement for construction and professional services. Section 2.2-4300(C) states: "Public bodies may consider best value concepts when procuring goods and nonprofessional services, but not construction or professional services." 6
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The Act defines certain procurement methods and mandates the use of specific methods depending upon the nature of the acquisition. 7 The two most common procurement methods are competitive negotiation and competitive sealed bidding. 8 The Act also authorizes certain non-competitive procurement methods, 9 and provides comprehensive guidelines with respect to the procurement process as a whole.
B. Competitive Negotiation. The Act provides a comprehensive definition of competitive negotiation and establishes a two-step competitive negotiation process. 10 The public body must first issue a written request for proposal (RFP) explaining what is being procured, specifying the evaluation criteria, indicating whether a numerical scoring system will be used to evaluate the proposal, and noting any "applicable contractual terms and conditions, including any unique capabilities, specifications, or qualifications that will be required." 11 The Act requires public notice of the RFP at least 10 days prior to the date set for receipt of proposals. 12 Public notice can be effected by:
posting on the Department of General Services' central electronic procurement website or other appropriate websites. Public bodies may also publish in a newspaper of general circulation in the area in which the contract is to be performed so as to provide reasonable notice to the maximum number of offerors that can be reasonably anticipated to submit proposals in response to the
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particular request. Posting on the Department of General Services' central electronic procurement website shall be required of (i) any state public body and (ii) any local public body if such local public body elects not to publish notice of the Request for Proposal in a newspaper of general circulation in the area in which the contract is to be performed. Local public bodies are encouraged to utilize the Department of General Services' central electronic procurement website to provide the public with centralized visibility and access to the Commonwealth's procurement opportunities. 13
Alternatively, it is permissible for public bodies to directly solicit proposals from potential contractors. 14
As an initial matter, the Act states that construction may be procured only by competitive sealed bidding, except that competitive negotiation may be used in certain instances. 15 The instances include: (i) design-build or construction management procurement by any public body, as provided in sections 2.2-4378 to -4383 of the Virginia Code; or (ii) procurement by any public body for the construction of highways and any draining, dredging, excavation, grading, or similar work upon real property upon a determination that competitive sealed bidding is either not practicable or not fiscally advantageous. 16
With respect to the procurement of professional services under competitive negotiation, 17 the Act requires the public body to "engage in
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individual discussions with two or more offerors deemed fully qualified, responsible and suitable on the basis of initial responses and with emphasis on professional competence, to provide the required services." 18 During discussions with the procuring body, offerors are "encouraged to elaborate on their qualifications and performance data or staff expertise pertinent to the proposed project, as well as alternative concepts." 19 While the Act does not permit an RFP to request estimates for hours or cost of services, the procuring body may, during the discussion phase, obtain "nonbinding estimates of total project costs, including, but not limited to, life-cycle costing, and where appropriate, nonbinding estimates of price for services." 20 In addition, for architectural or engineering services, the Act does not permit an RFP to "request or require offerors to list any exceptions to proposed contractual terms and conditions, unless such terms and conditions are required by statute, regulation, ordinance, or standards developed pursuant to § 2.2-1132, until after the qualified offerors are ranked for negotiations." 21 During the competitive negotiation process, the offerors' proprietary information cannot be released to the public or to competitors.
Section 2.2-4302.2(A)(4) further provides that, following discussions, the public body is directed to evaluate each offeror on the basis of the criterion set forth in the RFP in combination with information obtained during discussions, ultimately arriving at a preferred list of two or more offerors. Negotiations must then be conducted, starting with the top-ranked offeror. "If a contract satisfactory and advantageous to the public body can be negotiated at a price considered fair and reasonable and pursuant to contractual terms and conditions acceptable to the public body, the award shall be made to that offeror." 22 If negotiations fail, the public body must terminate negotiation with the first-ranked offeror and proceed to negotiate with the offeror ranked second on the preference list, repeating the process until a fair and reasonable price is negotiated. 23
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With respect to the procurement of other services, excluding professional services, the Act authorizes a procuring body to select two or more offerors "deemed to be fully qualified and best suited among those submitting proposals, on the basis of the factors involved in the [RFP], including price if so stated in the [RFP]." 24 Similar to the procurement of professional services by competitive negotiation, section 2.2-4302.2 requires negotiations to be conducted with each selected offeror. While price may be considered, the Act does not require that it be the determining factor. Following negotiations, "the public body shall select the offeror which, in its opinion, has made the best proposal and provides the best value, and shall award the contract to that offeror." 25 However, as noted in Section 5.202, public bodies may not consider best value concepts when procuring construction or professional services.
Regardless of the nature of the procurement, the Act's definition of competitive negotiation provides direction for a procurement in which the public body, upon a written determination in its sole discretion, decides that only one offeror is fully qualified, or that one offeror is clearly more highly qualified than the others under consideration. 26 If an offeror is selected, the Act authorizes a contract to be negotiated and awarded to the selected offeror.
C. Competitive Sealed Bidding. Section 2.2-4302.1 of the Virginia Code also provides a comprehensive framework for competitive sealed bidding, which is used for certain procurements other than professional services acquisitions. A public body using competitive sealed bidding is directed to issue a written invitation to bid (ITB) which contains or incorporates by reference the specifications, terms of the contract, and applicable conditions. Unless the public body requires prequalification of bidders, the ITB must include a statement of required qualifications. 27 In cases where it is impractical to prepare a purchase description in support of a price-based award, the public body may issue an ITB "requesting the submission of unpriced offers to be followed by an [ITB] limited to those bidders whose
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offers have been qualified under the criteria set forth in the first solicitation." 28
The procuring body is required to give public notice of the ITB "by posting on the Department of General Services' central electronic procurement website or other appropriate websites" at least 10 days prior to the date bids are due. 29 Publication on the Department of General Services' central electronic procurement website is required for any state public body. 30 Local public bodies are also encouraged to use the Department of General Services procurement website. As in competitive negotiation, the competitive sealed bidding process permits public bodies to directly solicit bids from potential...
