Conducting Negotiations when No Responsive Bids are Received - 906

In rare cases, it may be necessary to negotiate with bidders participating in a competitive procurement even when no responsive, responsible bid has been received.  This can happen when repeated solicitations yield no bidders or when the complexity of the administrative, technical or cost requirements results in all bids failing to meet the requirements.  Departments shall follow these steps in those circumstances.

1. Obtain approval from DGS or CDT, as applicable, to use negotiations.  Usually, "the complexity of the purpose or need suggests a bidder’s costs to prepare and develop a solicitation response are extremely high" or “negotiation is necessary to ensure the department is receiving the best value” will apply (Public Contract Code §6611(a)(3) or (4)).
2. If any responsive, responsible bids have been received, buyers must follow the procedures from negotiations from the outset of a procurement or negotiations during a procurement sections.
3. In order to use negotiations in this circumstance, the criteria for participation must have been established in the solicitation (either from the outset or through an addendum).   Any of the following criteria may be used:
1. All firms that submitted a bid may participate.
2. Bidders within a competitive range may participate. Rankings may be established by using a percentage of required items and/or scoring non-mandatory items.
3. The highest-ranking bidder negotiates first, then, if no agreement can be reached, the next highest similarly ranked bidder may negotiate continuing the process until the state reaches an acceptable agreement. Rankings may be established by using a percentage of required items and/or scoring non-mandatory items.
4. Negotiate.
   1. Follow the rules of the solicitation in negotiating with bidders.
   2. Negotiations may be completed after a single round or may be done in several rounds.
   3. Negotiations may be conducted orally and/or in writing.  Oral negotiations may be held in person, by conference call, or by use of video or web conferencing.
   4. The negotiation process may include persuasion, alteration of assumptions and positions, give and take, and may apply to price, schedule, requirements, or other terms of the proposed contract.  The state may discuss other aspects of the Bidder’s proposal that could, in the opinion of the state, be altered or explained to enhance materially the proposal’s potential for award.  However, the state is not required to discuss every area where the Bidder’s proposal could be improved.  The scope and extent of negotiation exchanges are the matter of the state’s judgment.  All Bidders currently in negotiations will be notified of changes in requirements.
   5. The state may establish a negotiation team to consist of representatives from DGS, and the requesting department, and other state representatives.
5. Final evaluation and award.  Use one of the following options to make a final award:
1. Using the original criteria in the solicitation, score all proposals based on either the results of negotiations or, if applicable, the BAFO. Award to the highest ranked bidder.
2. Revise the evaluation criteria based on the results of the negotiations.  Prior to final evaluation, all bidders participating in negotiations shall be informed of the revised evaluation criteria and shall have the opportunity to submit a BAFO based on those criteria.  Award to the highest-ranked bidder.
6. Issue a final evaluation and selection report documenting any decisions relating to selection of bidders to participate in negotiations, final scoring of proposals, and award decisions.  The final evaluation and selection report becomes a public record.