There are a lot of things to consider in the procurement of goods. To find the best quality products and services at the best possible price plays an important role when looking for low-cost suppliers, and sometimes bidding is recommended. The recipient of the offer should select the bidder that has offered the lowest price and/or best terms.
The first step is to select several qualified suppliers; take into consideration that the best way to determine if an offer is competitive, is to request a bid.
Bidding will allow you to verify that the pricing provided by the supplier is, in fact, competitive. Make sure to request business proposals from multiple suppliers, since it allows to you to see the average competitive bid prices.
It’s important to point out that although the lowest bidder is most likely to win the bid, lack of capacity, quality conditions, time management, reputation, or inability to meet the bid specifications are some factors that you may encounter along the way. If you are trying to source for the lowest cost possible, be careful because you very well might end up with really low quality products. Our advice for you is to always check the product and its manufacturing before you close the deal with the supplier and make sure to always have a second option in case the bid winner does not reach your standards.
Here are some tips on preparing for a bid:
- Prepare and evaluate the bid.
- Take the time to review the bids carefully.
- Specify a deadline for receipt of bids.
- All suppliers should receive identical copies of your bid documents.
- Once bids are received, evaluate them in a fair and open process.
- Narrow the field by determining which vendors are responsive. Note: A responsive bid will include all the information needed to procure the product or service up front.
- Consider the supplier’s past performance.
- Always compare total acquisition and life cycle cost, such as shipping, service agreements, etc.
- Once you have a selection of your best offers, you can always go back to the supplier and let them know they are one of your finalists and negotiate a lower counter-offer.