What process uses the lowest price as the basis for awarding a contract?

Sealed bidding is a procurement method that emphasizes transparency and fairness in the awarding of contracts. In this process, vendors submit their bids independently and in a sealed format, meaning they cannot see each other's proposals until the opening occurs. The primary criterion for selecting a bid in sealed bidding is the lowest price that meets the specifications outlined in the solicitation. This approach not only fosters competition among bidders but also ensures that the awarding agency can fulfill its requirements at the most cost-effective price, thus benefiting taxpayers and organizations allocating public funds.

This method is particularly favored in scenarios where the requirements are clear-cut and can be precisely defined, allowing a straightforward comparison of bids based solely on price. In contrast, other methods such as negotiated source selection involve discussions and adjustments with suppliers, which do not exclusively center on price, and processes like direct purchase and contract renewal serve different procurement purposes and do not conform to the competitive bidding model where pricing is the sole determinant.