When can a contracting officer use competitive proposals instead of sealed bids?

The use of competitive proposals instead of sealed bids is appropriate when it is necessary to conduct discussions. This process distinguishes itself from sealed bidding, which is primarily based on a straightforward evaluation of the bid prices submitted. In competitive proposals, the contracting officer can engage in dialogues with the offerors to clarify aspects of their proposals, address deficiencies, and explore innovative solutions. This process allows for a more comprehensive evaluation of the proposals based not only on price but also on factors such as technical merit, past performance, and value-added capabilities.

The reason why other options are less relevant to when competitive proposals can be employed lies in the principles governing federal contracting. For instance, whether a contract is under a specific dollar threshold does not strictly govern the method of procurement. Similarly, insufficient funds may necessitate a different approach for funding but does not directly correlate with the method of proposal submission. Lastly, receiving fewer than three bids does not automatically justify switching from sealed bidding to competitive proposals, as sealed bidding can still proceed if a minimum number of bids are received. Therefore, the need for discussions, as evidenced in option B, fundamentally supports the rationale for opting for competitive proposals in the federal contracting environment.