Can anyone explain why FAR Part 13 refers to the term "offer" and "offeror"? Part 2 specifically states a quote is not an offer. So why use the term "quote or offer" when it isn't applicable to that Part. Or, is it?

My thoughts: If I wanted to write a purchase order that was binding upon it's award versus acceptance by the contractor, has the FAR allowed me to do that with the inclusion of the term "offer". Interesting, because that is what I would like to do. I don't want to wait for the contractor to start performance or sign the purchase order, too much time lost and I figure if the contractor submitted an offer/quote, they must want the award. So, did I just find my way to do that, or is it wishful thinking on my part.

By Anonymous on Wednesday, March 14, 2001 - 10:37 am:

Wishful thinking...more later.

By DLM on Wednesday, March 14, 2001 - 12:19 pm:

Just curious, how much later??? I have a 1:00 meeting and would love to take more info. into it than I have right now. J

Thanks - D

By Kennedy How on Wednesday, March 14, 2001 - 12:26 pm:

I believe it's wishful thinking as well. Part 13 is kind of an odd duck when it comes to certain areas, especially acceptance. If it's the contractor's right to refuse acceptance, then contractually, we shouldn't have to pound on the guy because he chose to exercise his right. There should not be a stigma attached to it.

I have another spin on the acceptance issue, think I'll start a new thread.

Kennedy

By DLM on Wednesday, March 14, 2001 - 12:35 pm:

Kennedy - But why use a term that is associated with "proposals" and "bids" when it doesn't fit. At first I thought it was in Part 13 just to make it clear what was meant by the term "quote", you know, like, an offer really means a quote. But then I read the definition in Part 2 and realized it can't be that. Part 2 says in Part 14 a "bid" means offer, in Part 15 a "proposal" means offer, but Part 13 a "quote" does NOT mean offer. So I just don't get it.

D

By Kennedy How on Wednesday, March 14, 2001 - 12:45 pm:

DLM - the only thing that I could think of regarding quotes becoming offers is if your quote exceeds the SAP threshold. I remember thinking this way back during my neophyte 1102 days (early 80s). I don't know if this is an accurate description or not, but here at my activity, if the RFQ comes back exceeding the SAP, we switch to a "26" contract (using the SF26 form, whereby the contractor has to sign). If it was a normal, non-SAP acquisition, we would just make their proposal a part of the award document. But since it started out in the RFQ stage, we'd have to do all the clauses, plus reps and certs. I also remember sometimes we'd get these "letter bids", which stated that the responder accepts and complies with all terms and conditions of the solicitation. I never figured out if they meant the RFQ, or an RFP, because their reply came in above the SAP.

I don't ever recall us doing, say, what today would be a $150K "Purchase Order".

Kennedy

By DLM on Wednesday, March 14, 2001 - 01:25 pm:

I didn't think about what would happen if what was suppose to be a simplified acquisition, turned out to be greater than the SAT, so you have to convert to a contract. Interesting. But, did they really put those two words, "offer" and "offeror" in part 13 just to cover this type of situation. Well, better get ready for my meeting. I'll check back here later today. Any more information will be greatly appreciated!! Thanks - Diane

By Linda Koone on Wednesday, March 14, 2001 - 01:36 pm:

DLM:

I think the use of the term 'offer' in FAR Part 13 relates to the SF 1449. The signature block on the form references the offeror/contractor as opposed to the SF 18 which asks for the quoters signature. The response to an SF 1449 can be an offer. The SF 1449 is an authorized form under FAR Part 13. Hence, the use of the word offer.

That's my guess, anyway. But a quote is never an offer. The purchase order issued as a result of a quote is the offer.

By Anonymous on Wednesday, March 14, 2001 - 02:16 pm:

This is really confusing. A quote is not an offer. If you request a quote from a company, you are not making an offer. If you receive a quote from three companies and you send one of them a Purchase Order, then you are offering the company the opportunity to perform. If you solicit, you do not offer until the PO is written. In all contracts you offer, they accept. That makes them the offeror. Please explain.

By Linda Koone on Wednesday, March 14, 2001 - 02:28 pm:

To address your points/questions:

A quote is not an offer. THAT IS CORRECT.

If you request a quote from a company, you are not making an offer.

THAT IS CORRECT. YOU ARE MERELY ASKING FOR A QUOTE.

If you receive a quote from three companies
and you send one of them a Purchase Order, then you are offering the company the opportunity to perform.

CORRECT. THE PO IS THE GOVERNMENT's OFFER.

If you solicit, you do not offer until the PO is written.

CORRECT, if you solicit via RFQ. NOT CORRECT if you are soliciting using an RFP/IFB.

In all contracts you offer, they accept. That makes them the offeror.

I don't follow your question. Could you please rephrase?

By C Mercy on Wednesday, March 14, 2001 - 03:37 pm:

Its a pretty fair question and I think you will find the answer in the Uniform Commercial Code.A quote is not an indication of a desire to be bound...number one. That is why it is not considered a proposal. Although the term,as DLM correctly points out,is found in Part 13 it is a term of art not legalities. Its use ,in its most common sense,implies a starting point, and conveys no promise to be obliged to perform. Since both IFBs and RFPs can be issued using simplified procedures the term "offer" is, I think,correct as it is not called a proposal; which is quite different. This is also born out by the fact that if you issue an RFP because you anticipate that it will exceed the SAP thresholds, and an acceptable proposal comes in under the SAP threshold, you are not permitted to convert it to a purchase order;the reason being you would be converting an offer to sell and where you bind to an offer to buy where the other binds. A quote is ,after all is said and done, not much more than getting Sears to send you a catalog....obtaining information is ,and never has been a guarantee that one will sell to you. (UCC).

By anon4 on Thursday, March 15, 2001 - 09:54 am:

We have just recently been having this same discussion in my office and are having the same problem with understanding or difference of opinion on the "quote" received. I referred someone to FAR part 13.004, to understand what the Legal effect of a quote is.

A co-worker came up with the following explanation after attending a course on the effect that the FAR Part 15 rewrite had on the acquisition regulations. His instructor explained the rewrite as having had this effect with respect to quotes. "The rewrite had the effect of eliminating the term Request for Quote and changed it to a RFI (Request for Information) because that is exactly what you are getting when you ask for a quote. You don't have an offer to accept so in effect you have accomplished exactly what you have under an RFI. Although the concept is not too far fetched, I had to ask then and still say, if that is so why did they leave the "18" in the FAR Forms and the "quote" in FAR. I agree with those who say the quote is not an offer and that by issuance of the order, the Government is extending the offer as opposed to accept an offer as is the case in an IFB or RFP.

By DLM on Thursday, March 15, 2001 - 01:05 pm:

I'm not sure when the Part 15 rewrite was. I'm pretty sure it was after the inclusion of the term "offer" in part 13. So, I guess I don't buy the co-worker explanation. The instructor mentioned above sounds like he has some wishful thinking going on too. Maybe we should title FAR Part 13 - Market Research and leave it at that. Thanks for all the comments.

By Linda Koone on Thursday, March 15, 2001 - 05:02 pm:

I think a distinction needs to be made between SAP (simplified acquisition procedures) and SAT (simplified acquisition thresholds). SAP, by definition, includes Purchase Orders, the Purchase Card, BPAs, and Imprest Funds and Third Party Drafts; and use of the SF18, SF1449 and SF44 ( DD1155 for DoD), and SF1165.

Some requirements are tied to the use of SAP (i.e., FAR Part 6); others to the SAT (various clause prescriptions, 52.203-6, 52.219-8...). That's an important distinction to consider when soliciting information or offers.

Certainly, if you believe your requirement may exceed the SAT, you may use other than SAP to solicit offers. But then make sure you comply with FAR Part 6,...

As for Anon 4's question, prior to the Rewrite, Part 15 included coverage on using RFQs for competitively negotiated contracts. I haven't read the FRFA on the Rewrite lately and don't know if it addressed this, but my guess is that the reference to an RFQ in Part 15 was replaced with RFI to make a clearer distinction for companies. If you receive an RFQ, there's a good likelihood that you (or someone) will be offered a purchase order in response to your quote. That isn't the case with the RFI. There's no intent for the Govt. to offer a PO in response to information supplied in response to an RFI.

DLM: The Part 15 rewrite preceded the Part 13 reorganization by 1 FAC and about 2 months. And FAR Part 13 is much more than market research. May I ask why you see it as such?

By anon4 on Friday, March 16, 2001 - 07:55 am:

To DLM,
The "he" that you refer to is a "she" and is and was a member of the FAR council. She was very instrumental in the FAR Part 15 rewrite or that's the way my co-worker explains it. My guess is it probably isn't wishful thinking on the instructor's part.

By Anonymous on Friday, March 16, 2001 - 10:30 am:

DLM:

On March 14, you asked why FAR uses the term offer in Part 13, e.g., 13.106-2. You appear to understand that an offer is a promise to perform and that a quote is just information which cannot be accepted to form a contract.

The answer to your question is simple: FAR uses the term offer in Part 13 because you can solicit offers instead of quotes when conducting a simplified acquisition if you want to.

Although the normal procedure is to solicit quotes and then issue a purchase order -- which is an offer to buy that the contractor can accept either by signature or performance -- nothing in Part 13 prohibits you from soliciting offers instead of quotes. For example, if the simplified acquisition is to be made on a sole source basis [see 13.106-1(b)], then you might want to solicit an offer instead of a quote.

All the talk in this thread about the FAR Part 15 Rewrite is beside the point. That Rewrite had nothing to do with acquisitions under the SAP threshold. Moreover, the Rewrite eliminated the term request for quotations only with regard to negotiated procurements in excess of the SAP. The term effectively continues in use in Part 2, Part 8, and Part 13.

DLM: If you want to solicit an offer instead of a quote when conducting a simplified acquisition, then do it. Your oral or written request for offers will be just like a request for quotations, except that you must make it clear that you want a prospectively binding offer and not just a quote. Beware, however -- some small commercial firms may not understand the difference between an offer and a quote.

By Linda Koone on Monday, March 19, 2001 - 01:38 pm

Anonymous:

Can you please clarify a question that I have with respect to your response?

You've stated that - -

'FAR uses the term offer in Part 13 because you can solicit offers instead of quotes when conducting a simplified acquisition if you want to.

and

'... nothing in Part 13 prohibits you from soliciting offers instead of quotes'

My understanding is that you can use whatever method you want to solicit offers or quotes for acquisitions below the simplified acquisition threshold, but not all of these methods would necessarily be considered simplified acquisition procedures.

I agree that you can solicit offers, when conducting acquisitions subject to Subpart 13.5 and that's why I believe the term offer appears in Part 13.

Are you suggesting that any solicitation of an offer (such as those described in FAR Part 15) can now be considered a 'simplified acquisition procedure'?

By Anonymous on Monday, March 19, 2001 - 03:59 pm:

Not exactly....as your note FAR 13.002 (g) (1) allows for any of five FAR part acquisitions under the SAP threshold. Now while it is true that if you use Part 14,15,35 or 36 it is not as simple as a straight small purchase procedure but by the same token it is not nearly as complex as a regular above SAT non commercial IFB or RFP. The key issue is that under the SAT both IFBs and RFPs are offers (again you are right as to why offers are included in part 13 ( the Definitions Clause uses the word offer to mean both a sealed bid as well as a proposal, both being an indication of willingness to be bound(when awarded). If you have a <100k critical action you should consider using part 14 or 15 in order to ensure performance. Also, the T4D clause is listed as optional for SA Procedures so inclusion in a critical RFQ would also be well advised. Yes?

By DLM on Monday, March 19, 2001 - 04:35 pm:

This has turned out to be very helpful. Thank you all for responding to my original question. Please let me clear a couple of things up. First, as for the instructor, whether a he or she, I only meant their information for FAR Part 15, was just that, FAR Part 15 and not 13. So, to teach that the rewrite of 15 was also applicable to 13 would not be accurate. Which brings me to the next issue, I said maybe we should change the name of 13 to market research, that was only said in jest, as a result of the comments about RFI(s), but once again, that really pertained to Part 15 and not 13, or at least not to the question I was asking. I now think, if I want to insure an order is binding upon it's award, and not upon acceptance by the contractor, and I want to use the procedures in Part 12/13 (Commercial Item/Simplified Acquisition) all I really have to do, is insure the vendors understand I want a binding offer and not simply a quote. Again, thanks.