Defining “responsive, responsible” in your procurement policy


Posted On: February 27, 2017

We’ve all had to send out for quotes for purchases, right? And we all have to comply with our procurement policy, but how many times have you looked at those quotes and thought, “Company C has the lowest quote, but their work isn’t the same quality as Company A and Company B?”

Most of the policies we’ve found online allow you to contract “the lowest responsive, responsible bidder.” But how do we define the words “responsive” and “responsible”? How do we apply them fairly to the bidders while keeping in step with the law? In this post, we’ll take a look at various procurement policies around the United States. We will also look at the definitions of the 2 R’s.

Keep in mind, every entity is different. We recommend checking your agency’s procurement policy. You should also consult your legal department for clarification.

procurement policy

Procurement policy and bidding

The goal of requesting quotes and receiving bids, of course, is to save your agency money, right? At the same time, The Office of the New York State Comptroller says competition protects the agency.

“Seeking competition also guards against favoritism, extravagance and fraud, while allowing interested vendors a fair and equal opportunity to compete.”

-Office of the State Comptroller in New York

It’s a way to keep us honest in how we award contracts, but policies that once insisted you use “the lowest bidder” now allow for common sense.  The problem becomes in how we define the two R’s: responsive and responsible.

NGIP’s lexicon

We found the following definitions from “the NIGP Dictionary of Purchasing Terms.” The Institute for Public Procurement runs the site.

  • Lowest Responsive and Responsible Bidder: The bidder who fully complied with all of the bid requirements and whose past performance, reputation, and financial capability is deemed acceptable, and who has offered the most advantageous pricing or cost benefit, based on the criteria stipulated in the bid documents.

Notice how this definition alludes to quality. One city refers to quality in its purchasing policy. One of the goals of this policy is:

“To receive maximum value for money spent by awarding purchase orders to the lowest responsible, responsive bidder, taking into consideration quality, performance, support, delivery schedule, previous performance, business location, and other relevant factors.”

This policy also adds in its general guidelines:

Quality and service are as important as price when considering goods for purchase; it is the duty of the requesting department to secure the most cost-effective good or service that will meet but not exceed the requirements for which the goods or services are intended. In some instances the lowest price does not necessarily mean the lowest cost. A higher price, higher quality product may save the City from excess expenses in the future. The requesting department should take this into consideration when making a purchase.”

  • Responsive Bidder/Proposer: A contractor, business entity, or individual who has submitted a bid or proposal that fully conforms in all material respects to the Invitation for Bids (IFB)/Request for Proposals (RFP) and all of its requirements, including all form and substance (NGIP).

According to the Georgia Tech Procurement Assistance Center (GTPAC), “Any deviation from the requirements of the Bid Documents may be considered non-responsive..Minor deviations are a matter of form and not of substance, or they pertain to some immaterial or inconsequential defect or variation from the exact requirement of the Bid Documents.”

It seems a little picky in many respects; however, GTPAC says “public entities have the discretion to waive minor deviations.” You can read a GTPAC’s example of  what a “minor deviation” is here.

  • Responsible Bidder/Proposer: A business entity or individual who has the financial and technical capacity to perform the requirements of the solicitation and subsequent contract (NGIP).

We’ll use a very detailed definition from BusinessDictionary.com to explain this one. It states a “contractor, supplier or vendor” is “qualified on the basis that it:”

(1) has adequate financial resources to perform a contract,

(2) is able to comply with the associated legal or regulatory requirements,

(3) is able to deliver according to the contract schedule,

(4) has a history of satisfactory performance,

(5) has good reputation regarding integrity,

(6) has or can obtain necessary data, equipment, and facilities, and

(7) is otherwise eligible and qualified to receive award if its bid is chosen.

Notice it says and not or. If you choose to use this checklist, the “responsible bidder” must meet ALL the criteria listed above.

What about the lowest bidder?

Most of the policies I’ve found online do allow for purchases besides the lowest quote. Chances are yours does, too. When you choose a contractor other than the lowest bidder, what does your policy mandate? Does it require an explanation about why they chose a vendor that is not the lowest bidder. Many of those provisions read as follows:

Whenever an award is made to other than the lowest quote the reasons for doing so shall be set forth in writing and maintained in the procurement file.

“This explanation should be detailed enough that anyone reviewing the documentation would reasonably choose the same vendor,” says Navigate COO Julie Reynolds.

How do I document it?

When you reject the lowest bid, make sure to document why you didn’t take the lowest price. Here is a 2010 example of how one city documented the reasons behind a rejected low bid. It’s good stuff!  It  highlights the issues to consider when documenting your choice.

  1. What does your code or procurement policy allow when it comes to “lowest responsive and responsible bidder?”
  2. Does your policy spell out your agency’s “right to reject the Bid of any Bidder whom it finds.. to be nonresponsible” or “not in the best interest of the project”?
  3. Is the lowest bidder “responsible”?
    • Have you investigated the “past performance of the lowest bidder.. and the nature of the project”?
    • How has the bider performed for  your agency in the past?
    • Can you explain in detail what happened with previous projects?
  4. Is the lowest bidder’s quote “responsive?”
    • Did they submit all materials requested as requested?

Again, be sure you follow the rules of your specific procurement policy. You should also consult your legal team if you have questions!


Do you have affordable housing projects coming up that need EXPERT attention.  Contact Navigate today!

procurement policy



YOU MIGHT ALSO LIKE

COVID-19 Cases in our States

COVID-19 Cases in our States

The following information is a list of confirmed COVID-19 cases in the four states that Navigate has PBCA contracts in. Last updated as of 12 pm on March 16th, 2020.

Read More
REAC changes

#TuesdayTip: The shutdown ended.. now what?

This week’s #TuesdayTip is about post-shutdown operations. Here’s a link to the HUD memo Vickie mentions.

Read More
Mother's Day 2017

Happy Mother's Day

Mother’s Day 2017 Did you know that Americans will spend $23.6 billion on Mother’s Day this year? That’s a record […]

Read More