FAR 14.408—Award.

General.

FAR 14.408-1 explains how a contracting officer makes award in sealed bidding and what must be true before award can be issued. It covers the timing of award, the requirement to award to the responsible bidder whose bid is responsive and most advantageous based only on price and price-related factors, and the need to obtain all required approvals before award. It also addresses what to do when fewer than three bids are received, including examining the cause of limited competition and taking corrective action for future solicitations when appropriate. The section further describes the mechanics of award documents: mailing or furnishing the executed award, following a notice of award with the formal contract, handling multiple awards from one invitation, reserving additional items for later award within the bid acceptance period, and ensuring the award document accurately reflects all invitation terms and any acceptable bid changes. Finally, it identifies the standard forms commonly used for award and clarifies that informal or electronic notices may supplement, but do not replace, the formal award document. In practice, this section is about both the legal validity of the award and the administrative discipline needed to document a sealed bid contract correctly.

Responsible bidder-reasonableness of price.

FAR 14.408-2 explains two core conditions that must be satisfied before award in sealed bidding: the prospective contractor must be responsible, and the bid price must be reasonable. It also tells contracting officers they may use the price analysis techniques in FAR 15.404-1(b) as guidance when evaluating bid prices, but they must make the decision based on all prevailing circumstances rather than a rigid formula. The section places special emphasis on single-bid situations, where the contracting officer must exercise particular care because there is no competitive price comparison from multiple bids. It also requires the price analysis to address whether bids are materially unbalanced, tying the award decision to the risk that front-loaded or otherwise skewed pricing could create problems for the Government. In practice, this section is about protecting the Government from awarding to a bidder that cannot perform, or at a price that is not fair and reasonable, or under a pricing structure that could distort the value of the award over time.

Prompt payment discounts.

FAR 14.408-3 addresses how prompt payment discounts are handled in sealed bidding. It covers two main subjects: first, that prompt payment discounts are not to be used as a factor in evaluating bids; and second, that any discount a bidder offers still becomes part of the award and may be taken by the payment center if the government pays within the stated discount period. The section also recognizes an alternative approach, allowing bidders to offer discounts on individual invoices instead of tying the discount to the bid itself. Finally, it points readers to FAR 32.111(b)(1) and the contract clause at 52.232-8, which govern discounts for prompt payment in the contract. In practice, this means contracting officers must separate bid evaluation from payment terms, while contractors must understand that discount language can affect actual payment even though it does not affect bid ranking.

Economic price adjustment.

FAR 14.408-4 explains how sealed bidding handles economic price adjustment (EPA) when the solicitation either does not include an EPA clause or does include one. It covers four main situations: a bidder proposes its own EPA clause with a ceiling; a bidder proposes an EPA with no ceiling; the Government includes an EPA clause and bidders accept it as written; and bidders take exception by increasing, decreasing, limiting, or deleting the EPA terms. The section also addresses how bids must be evaluated, when a contracting officer may seek agreement to add an approved EPA clause after bid opening, and when a bid must be rejected as nonresponsive. In practice, this rule is about preserving fair, equal evaluation in sealed bidding while allowing limited price adjustment protection against future cost changes. It matters because EPA terms can materially change the real price the Government will pay, so the contracting officer must evaluate bids on a consistent basis and ensure any post-opening award terms do not give a bidder an unfair advantage or alter responsiveness rules.

[Reserved]

Equal low bids.

FAR 14.408-6 explains how a contracting officer must resolve equal low bids in sealed bidding when two or more bids are tied in all respects. It establishes a mandatory order of priority: first, small business concerns that are also labor surplus area concerns; second, other small business concerns; and third, other business concerns. If the tie still cannot be broken after applying those priorities, the contracting officer must use a drawing by lot limited to the remaining equally eligible bidders. The section also requires procedural safeguards for the drawing, including an opportunity for bidders to attend if time permits, at least three witnesses, and documentation in the contract file of the witnesses and the person supervising the drawing. Finally, when award is made using these tie-breaking priorities, the contracting officer must include a written agreement in the contract requiring the contractor to perform, or cause performance to be performed, in accordance with the circumstances that justified the priority used. In practice, this section ensures fairness, transparency, and a defensible record when sealed bids are identical and the government must choose among them.

Documentation of award.

FAR 14.408-7 explains what the contracting officer must put in the contract file to support an award made under sealed bidding. It covers three related documentation topics: compliance with FAR 14.103-2, the basis for concluding that the accepted bid was the proper low bid, and the explanation for any award made after receiving equal low bids. In practice, this section is about creating a clear audit trail that shows the award decision was made correctly, fairly, and in accordance with sealed bidding rules. The documentation must be detailed enough to justify why lower bids were not accepted, or to show that the accepted bid was in fact the lowest bid received. When bids are tied, the file must also explain exactly how the tie was broken. This protects the integrity of the procurement, supports post-award review or protest defense, and helps ensure the award can be understood by auditors, reviewers, and other stakeholders.

Protests against award.

FAR 14.408-8 is a cross-reference provision that tells readers that protests against an award made under sealed bidding are handled under FAR subpart 33.1, Protests. In practical terms, this section does not create a separate protest process for sealed bidding awards; instead, it directs contracting officers, bidders, and agencies to the governmentwide protest rules that govern where a protest may be filed, when it must be filed, what information it must contain, and how the agency should respond. Its purpose is to keep the award process in Part 14 aligned with the broader protest framework in Part 33, so that award decisions are not handled inconsistently from one procurement method to another. For contractors, the section signals that any challenge to a sealed bid award must be analyzed under the general protest rules, including timeliness and forum considerations. For contracting personnel, it is a reminder that award actions under sealed bidding can be protested and that the agency must be prepared to follow the Part 33 procedures immediately after award or notice of award. The practical significance is that this short section preserves the link between sealed bidding awards and the formal protest system, rather than allowing ad hoc handling of award disputes.