FAR 19.202-3—Equal low bids.
Plain-English Summary
FAR 19.202-3 addresses what happens when two or more bids are tied at the same lowest price in a sealed bidding procurement. Its purpose is to establish a mandatory tie-breaking order that gives preference first to a small business concern that is also a labor surplus area concern, and then, if no such bidder is available, to a small business concern that is not also a labor surplus area concern. In practice, this section works together with the equal-low-bid procedures in FAR 14.408-6 and the socioeconomic policy goals in FAR Part 19. It matters because contracting officers cannot simply choose any tied bidder; they must apply the prescribed preference sequence before considering other tie-break methods. The rule is narrow, but it can determine award when price competition produces identical low bids.
Key Rules
Apply tie-break order
When low bids are equal, the contracting officer must follow the order set out in this section rather than making an ad hoc selection. The first preference goes to a small business concern that is also a labor surplus area concern.
Second preference for small business
If no tied low bidder qualifies as both a small business concern and a labor surplus area concern, award goes next to a small business concern that is not also a labor surplus area concern. This means small business status is the key second-level preference in an equal-low-bid situation.
Works with FAR 14.408-6
This section expressly refers to the equal-low-bid procedures in FAR 14.408-6, so the contracting officer must use the broader sealed bidding tie-handling framework and then apply this preference rule. The section does not create a general award discretion; it only directs how to resolve equal low bids.
Limited to equal low bids
The rule applies only when bids are actually equal at the lowest price. It does not affect normal source selection, negotiated procurements, or situations where bids are not tied.
Responsibilities
Contracting Officer
Identify when low bids are equal, apply the tie-breaking preference order in the required sequence, and make award to the qualifying bidder that the rule favors. The contracting officer must ensure the award decision is consistent with FAR 14.408-6 and the small business/labor surplus area preference structure.
Small Business Concern
If tied at the low price, a small business bidder may receive the award preference, especially if it also qualifies as a labor surplus area concern. The bidder should be prepared to substantiate its small business status and any labor surplus area qualification if challenged or required by the solicitation or agency procedures.
Labor Surplus Area Concern
A bidder that is both a small business and a labor surplus area concern receives the first preference in an equal-low-bid situation. The concern must be able to demonstrate that it meets the applicable labor surplus area designation requirements.
Agency
Ensure procurement personnel understand and apply the mandatory tie-breaking rule consistently, and maintain documentation showing how equal low bids were resolved. The agency should also ensure solicitation and award records support the decision if reviewed or protested.
Practical Implications
This rule can decide the award even when multiple bidders offer the same best price, so status certifications and documentation matter.
Contracting officers should verify small business and labor surplus area status before making the award decision, because an incorrect status determination can lead to an improper award.
A common pitfall is treating equal low bids as a matter of discretion; this section requires a specific preference order, not a free choice.
Because the rule is narrow, it should not be applied outside sealed bidding equal-low-bid situations covered by FAR 14.408-6.
Careful file documentation is important so the agency can show why one tied bidder was selected over another.
Official Regulatory Text
In the event of equal low bids (see 14.408-6 ), awards shall be made first to small business concerns which are also labor surplus area concerns, and second to small business concerns which are not also labor surplus area concerns.