FAR 14.503-1—Step one.
Plain-English Summary
FAR 14.503-1 explains how step one of two-step sealed bidding works, from the initial request for technical proposals through evaluation, clarification, notice of unacceptability, late proposals, and what happens if the two-step process must be discontinued. It tells contracting officers what must be included in the request for technical proposals, including the description of supplies or services, the intent to use two-step bidding, proposal content requirements, evaluation criteria, the prohibition on prices in technical proposals, submission deadlines, the effect of acceptable proposals in step two, and whether one or multiple technical proposals may be submitted. It also addresses optional delivery or performance information, protection and handling of proposals, removal of price data, the time allowed for evaluation, the acceptable/reasonably susceptible/unacceptable categories, when the Government may proceed directly to step two, how to request clarifications or additional information, how to notify offerors of unacceptability and provide debriefings, treatment of late technical proposals, and the file documentation and notice required if two-step sealed bidding is discontinued. In practice, this section is designed to keep step one fair, fast, and focused on technical acceptability so that only technically acceptable bids compete on price in step two. It also protects the integrity of the process by preventing price exposure, limiting discussions to the submitting offeror, and requiring clear records when the process changes course.
Key Rules
Request must be fully synopsized
The request for technical proposals must be synopsized under FAR part 5 and must include all required minimum information. This ensures potential offerors receive enough notice and detail to decide whether to participate.
Include required proposal details
The request must describe the supplies or services, state the intent to use two-step sealed bidding, identify technical proposal requirements, and list evaluation criteria including all factors and significant subfactors. It must also state that proposals may not include prices or pricing information and set the submission deadline.
State step-two limitations
The request must explain that only bids based on technically acceptable proposals will be considered in step two and that each bid must be based on the bidder’s own technical proposal. This preserves the integrity of the two-step process and prevents bidders from relying on another offeror’s technical solution.
Set expectations for acceptability
Offerors must be told to submit proposals that are acceptable without extra explanation, that the Government may decide acceptability based only on the submitted proposal, and that the Government may move to step two without asking for more information. The Government may still request additional information or discuss proposals that appear reasonably susceptible of being made acceptable.
Allow notice of unacceptability
The request must state that an offeror will receive notice if its proposal is found unacceptable after evaluation. This gives offerors clear notice of the outcome and supports transparency in the process.
Control number of proposals
The request must say whether each offeror may submit only one technical proposal or multiple proposals. If multiple technical approaches are permitted, the Government generally benefits from allowing multiple proposals, and the solicitation should be structured accordingly.
Optional delivery information is nonbinding
The request may include delivery or performance information to help bidders decide whether to submit a proposal, but it must say that this information is not binding and that the actual requirements will be in the step-two invitation.
Protect proposals and remove price data
Upon receipt, the contracting officer must safeguard proposals from unauthorized disclosure, handle marked data under FAR 15.609, and remove any reference to price or cost. This protects source selection integrity and prevents price from influencing technical evaluation.
Evaluate quickly and by stated criteria
The contracting officer must set a reasonable evaluation period and complete the evaluation quickly. Technical proposals must be evaluated only against the stated criteria, not responsibility standards, and categorized as acceptable, reasonably susceptible of being made acceptable, or unacceptable.
Nonconforming proposals are unacceptable
Any proposal that modifies or fails to conform to the essential requirements or specifications of the request is nonresponsive and must be categorized as unacceptable. This rule keeps the technical screening focused on compliance with the Government’s minimum needs.
Clarify only when competition warrants it
The contracting officer may go directly to step two if enough acceptable proposals exist to ensure adequate price competition and further effort would not benefit the Government. Otherwise, the contracting officer should seek clarifications or additional information from proposals that may be made acceptable, and may hold discussions only with the submitting offeror.
Fix deadlines for clarifications
When requesting additional information, the contracting officer must set a time for discussions, submission of additional information, and incorporation into the proposal, though the time may be extended at the contracting officer’s discretion. Information submitted by the deadline determines whether the proposal becomes acceptable or remains unacceptable.
Notify and debrief unsuccessful offerors
If a proposal is found unacceptable, the contracting officer must promptly notify the offeror of the basis for the decision and state that revisions will not be considered. Upon written request, unsuccessful offerors are entitled to debriefing under FAR 15.505 and 15.506.
Late proposals follow late rules
Late technical proposals are governed by FAR 15.208(b), (c), and (f), not by ad hoc judgment. This means timeliness rules must be applied consistently and in accordance with the late-proposal provisions.
Discontinuing two-step requires documentation
If the Government stops using two-step sealed bidding, the contracting officer must document the facts and circumstances in the contract file and notify each offeror in writing. If step one yields no acceptable technical proposals or only one acceptable technical proposal, the acquisition may continue by negotiation.
Responsibilities
Contracting Officer
Prepare and synopsize the request for technical proposals; include all required solicitation content; protect proposals from unauthorized disclosure; remove price or cost references; establish and manage the evaluation period; evaluate proposals only against stated criteria; categorize proposals correctly; decide whether to proceed directly to step two or seek additional information; limit discussions to the submitting offeror; set deadlines for clarifications; notify offerors of unacceptability; provide debriefings when requested; apply late-proposal rules; and document and notify parties if two-step sealed bidding is discontinued.
Offeror / Bidder
Submit a technical proposal that is complete, price-free, and responsive to the stated requirements; follow any rule limiting the number of proposals; provide any requested clarifying or supplementing information within the time set by the contracting officer; and base any step-two bid on its own technical proposal if its proposal is found acceptable.
Agency / Government
Ensure the acquisition is properly synopsized and that the two-step process is used only when appropriate; maintain the integrity and confidentiality of technical proposals; and support the transition to step two or to negotiation if the two-step process is discontinued or does not produce enough acceptable technical proposals.
Practical Implications
This section is all about front-end discipline: if the request for technical proposals is incomplete or unclear, the rest of the two-step process can be compromised.
Contracting officers should be careful not to let price information slip into step one, because technical evaluation must be insulated from pricing considerations.
A common pitfall is treating a technically weak proposal as if it were merely a responsibility issue; under this section, the key question is whether the proposal meets the stated technical requirements.
If too few proposals are acceptable, the contracting officer has to balance the value of seeking clarifications against the need to move quickly and preserve competition.
Offerors should understand that they may not get a second chance unless the contracting officer chooses to request additional information, so the initial submission should be complete and self-sufficient.
If the process is discontinued or only one acceptable technical proposal remains, the file must clearly explain why the two-step method was not continued and the parties must be notified in writing.
Official Regulatory Text
(a) Requests for technical proposals shall be synopsized in accordance with part 5 . The request must include, as a minimum, the following: (1) A description of the supplies or services required. (2) A statement of intent to use the two-step method. (3) The requirements of the technical proposal. (4) The evaluation criteria, to include all factors and any significant subfactors. (5) A statement that the technical proposals shall not include prices or pricing information. (6) The date, or date and hour, by which the proposal must be received (see 14.201-6 (r)). (7) A statement that- (i) In the second step, only bids based upon technical proposals determined to be acceptable, either initially or as a result of discussions, will be considered for awards, and (ii) Each bid in the second step must be based on the bidder’s own technical proposals. (8) A statement that- (i) Offerors should submit proposals that are acceptable without additional explanation or information, (ii) The Government may make a final determination regarding a proposal’s acceptability solely on the basis of the proposal as submitted; and (iii) The Government may proceed with the second step without requesting further information from any offeror; however, the Government may request additional information from offerors of proposals that it considers reasonably susceptible of being made acceptable, and may discuss proposals with their offerors. (9) A statement that a notice of unacceptability will be forwarded to the offeror upon completion of the proposal evaluation and final determination of unacceptability. (10) A statement either that only one technical proposal may be submitted by each offeror or that multiple technical proposals may be submitted. When specifications permit different technical approaches, it is generally in the Government’s interest to authorize multiple proposals. If multiple proposals are authorized, see 14.201-6 (s). (b) Information on delivery or performance requirements may be of assistance to bidders in determining whether or not to submit a proposal and may be included in the request. The request shall also indicate that the information is not binding on the Government and that the actual delivery or performance requirements will be contained in the invitation issued under step two. (c) Upon receipt, the contracting officer shall- (1) Safeguard proposals against disclosure to unauthorized persons; (2) Accept and handle data marked in accordance with 15.609 as provided in that section; and (3) Remove any reference to price or cost. (d) The contracting officer shall establish a time period for evaluating technical proposals. The period may vary with the complexity and number of proposals involved. However, the evaluation should be completed quickly. (e) (1) Evaluations shall be based on the criteria in the request for proposals but not consideration of responsibility as defined in 9.1 , Proposals, shall be categorized as- (i) Acceptable; (ii) Reasonably susceptible of being made acceptable; or (iii) Unacceptable. (2) Any proposal which modifies, or fails to conform to the essential requirements or specifications of, the request for technical proposals shall be considered nonresponsive and categorized as unacceptable. (f) (1) The contracting officer may proceed directly with step two if there are sufficient acceptable proposals to ensure adequate price competition under step two, and if further time, effort and delay to make additional proposals acceptable and thereby increase competition would not be in the Government’s interest. If this is not the case, the contracting officer shall request bidders whose proposals may be made acceptable to submit additional clarifying or supplementing information. The contracting office shall identify the nature of the deficiencies in the proposal or the nature of the additional information required. The contracting officer may also arrange discussions for this purpose. No proposal shall be discussed with any offeror other than the submitter. (2) In initiating requests for additional information, the contracting officer shall fix an appropriate time for bidders to conclude discussions, if any, submit all additional information, and incorporate such additional information as part of their proposals submitted. Such time may be extended in the discretion of the contracting officer. If the additional information incorporated as part of a proposal within the final time fixed by the contracting officer establishes that the proposal is acceptable, it shall be so categorized. Otherwise, it shall be categorized as unacceptable. (g) When a technical proposal is found unacceptable (either initially or after clarification), the contracting officer shall promptly notify the offeror of the basis of the determination and that a revision of the proposal will not be considered. Upon written request, the contracting officer shall debrief unsuccessful offerors (see 15.505 and 15.506 ). (h) Late technical proposals are governed by 15.208 (b), (c), and (f). (i) If it is necessary to discontinue two-step sealed bidding, the contracting officer shall include a statement of the facts and circumstances in the contract file. Each offeror shall be notified in writing. When step one results in no acceptable technical proposal or only one acceptable technical proposal, the acquisition may be continued by negotiation.