Legal Difference Between an RFP and an RFQ

When is an offer made? When does acceptance occur? In Computer Associates International, Inc.--Reconsideration, B-292077.6, May 5, 2004,GAO laid out the following holding:

"We recognize that, in practice, agencies and vendors often treat quotations just as they treat offers. Nonetheless, as a matter of law, quotations are different from bids or offers. The submission of a bid or proposal constitutes, by its very nature, an offer by a contractor that, if accepted, creates a binding legal obligation on both parties. Because of the binding nature of bids and offers, they are held open for acceptance within a specified or reasonable period of time, and our case law has necessarily developed rules regarding the government’s acceptance of “expired” bids or proposals. See, e.g., Consultants Ltd., B-286688.2, May 16, 2001, 2001 CPD ¶ 92 (holding that where a bidder agrees to hold its bid open for the minimum acceptance period required and extends its acceptance period with each agency request, the integrity of the bidding system is not compromised if the bidder is subsequently permitted to revive its expired bid); Esprit Int’l Corp., B-276294, Mar. 10, 1997, 97-1 CPD ¶ 106 at 2 (allowing bidder with shorter acceptance period to revive its bid after it had expired would afford the bidder an unfair advantage since its initial exposure to the risk of the marketplace was for a shorter period of time); CDA Inv. Tech., Inc.‑‑Recon., B‑27209.3, Mar. 11, 1997, 97-1 CPD ¶ 103 at 8 (stating that “it is not improper for an agency to accept an expired offer without opening negotiations where . . . acceptance is not prejudicial to the competitive system).

A quotation, on the other hand, is not a submission for acceptance by the government to form a binding contract; rather, vendor quotations are purely informational, Zarc Int’l, Inc., B‑292708, Oct. 3, 2003, 2003 CPD ¶ 172 at 2. In the RFQ context, it is the government that makes the offer, albeit generally based on the information provided by the vendor in its quotation, and no binding agreement is created until the vendor accepts the offer. Federal Acquisition Regulation (FAR) § 13.004(a). A vendor submitting a price quotation therefore could, the next moment, reject an offer from the government at its quoted price. Because vendors in the RFQ context hold the power of acceptance and their submissions are purely informational, there is nothing for vendors to hold open; thus, it simply does not make sense to apply the acceptance period concept or the attendant rules regarding expiration of bids or offers to RFQs. As a consequence, notwithstanding the statement in Serena’s revised price quotation that “[t]his offer is valid through June 31 [sic], 2003,” Serena’s discounted price was “valid,” or not, at Serena’s option, both before and after the date mentioned in the quotation--on whatever date the agency might present an offer to the firm."

OTHER ITEMS OF INTEREST:

From BNA Federal Contracts Report:

"SENATE VOTES TO BOOST DEFENSE ACQUISITION WORKFORCE, HOUSE VOTES TO CUT IT

The Senate adopts an amendment to its FY 2005 defense authorization bill that would increase the defense acquisition workforce by 5 percent each year for the next three years. In contrast, the bill passed by the House would cut the same workforce by 5 percent. . . ."

"COLLINS OFFERS BILL GIVING FEDERAL WORKERS' REP, ATO A-76 PROTEST RIGHT

Senate Governmental Affairs Committee Chairman Collins introduces a bill to give certain federal employees the right to protest federal agency public-private competition results at GAO. Both the agency tender official and the representative chosen by the affected federal employees would have standing to file a bid protest. . . ."

"WHISTLEBLOWER ALLEGING FRAUD IN FMS F-16 SALES TO GREECE MAY PROCEED

A consultant hired by General Dynamics to help persuade the Greek government to purchase F-16 fighter aircraft, who later filed a whistleblower action under the False Claims Act, will have his day in court on claims that GD defrauded the U.S. government of hundreds of millions of dollars under the foreign military sale. . . ."

FISCAL LAW ISSUE

Two recent GAO rulings on the use of appropriated funds bear a quick look.

In Department of Health and Human Services, Centers for Medicare & Medicaid Services --Video News Releases, B-302710, GAO found the use of appropriated funds to pay for production and distribution of story packages that were not attributable to the agency improper.

In Transfer of Fiscal Year 2003 Funds from the Library of Congress to the Office of the Architect of the Capitol, B-302760, May 17, 2004, GAO addresses what happens when one year money is transferred and ends up in the same pot as three year and no year money. Short answer: It retains its one year identity for obligation purposes. If you have funding issues involving the transfer of funds this opinion is well worth your time to read.