What differentiates contracting by negotiation from sealed bidding?

In the context of procurement methods, negotiation is distinct from sealed bidding primarily due to the interactive nature of the process. Contracting by negotiation allows for direct communication and dialogue between the contracting officer and potential contractors. This interaction facilitates discussion about various elements of the proposal, enables clarification of the contractor's offer, and allows for tradeoffs and adjustments to be made based on the negotiations. As a result, this method can lead to more tailored agreements that better meet the needs of both parties.

In contrast, sealed bidding is a more rigid process where bids are submitted without prior interaction; they are sealed and opened publicly at a specified time. Once bids are submitted, the contracting agency cannot engage with the bidders to modify their offers or discuss terms. This fundamental difference is what makes negotiation a more flexible approach in federal contracting compared to the more formal and structured process of sealed bidding.