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In certain cases, when the value of a government contract exceeds $100,000 and when it necessitates a highly technical product or service, the government may buy by negotiation.

  • Request for Proposal (RFPs, RFP)
  • Request for Tender (RFTs, RFT)
  • Request for Quotations (RFQs, RFQ)

Buying by negotiation involves the issuance of a Request for Proposal (RFPs, RFP), Request for Tender (RFTs, RFT), or Request for Quotations (RFQs, RFQ), and the negotiation of each element in the proposal. An award is made to the proposer who has the best proposal in terms of both technical content and price.

Negotiation procedures may be applied to more-or-less standard items, when negotiation authority has been properly documented by the contracting office. Products or services may be purchased by negotiation when it is impossible to draft adequate specifications or to describe fully the specific item, service, or project.

When buying by negotiation, the government uses procedures that differ from sealed bidding. Buying by negotiation is authorized in certain circumstances by law under applicable Federal regulations (Federal Acquisition Regulation or FAR).

Negotiated contracts often over advanced technology not widely supplied by small businesses and may include very complex areas of research and development, projects connected with highly sophisticated systems, missile programs, and aircraft and weapons systems.

In most instances, the government uses oral solicitations for purchases less than $25,000, written solicitations for purchases over $25,000, and purchase cards to obtain micro-purchases less than $2,500. 

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