How you are governed in respect to bid procedures for any RFQ, Tender or RFP you issue will vary depending on whose dollars you are spending. If you are a purchasing professional working for a public organization and spending tax payer dollars, you are likely using a different set of guidelines then a buyer representing a privately owned organization. Each private or independently owned company’s bid procedures might differ depending on their size and spend.
In addition to their bid list, public purchasing agencies are often mandated by statute or regulation to advertise their bids in local newspapers whereas private corporations usually draw bidders from an internal bid list only.
In a formal bid system, regardless of ownership structure or bidding guidelines, the bidder typically will be provided:
- Instructions to bidders – explains how, when, and where the response to the bid must be submitted;
- Specifications – a detailed specification which the item required must meet. This is often technical by nature and the RFQ might include pages of quality guidelines, engineering drawings and strict compliance requirements;
- Conditions – a set of legal, special and general conditions which must be met by the successful bidder;
- Bid Form – which your bidders will use to provide their cost and any other commercial terms.
For the opening and award component of your tender, this again will vary for the public purchaser when you compare practices to the private or corporate purchaser. The public purchaser is often required to open all bids in a public arena and will be required to disclose bid sums. Basically, they open the tender in front of anyone in attendance and post the sum to a white board. Many of the bidders will take part in the process just to see competitors bids. The private buyer is not required to follow this process and often has more flexibility when it comes to evaluating and awarding the bid.
The public buyer will have to justify and defend a selection if the lowest bidder is not awarded the tender. If the bidder meets all the criteria posted in the tender, RFP or RFQ and they are low bid often this is all that is required to be awarded the contract. For the selection criteria, more weight is put on unit cost whereas a private company might put more emphasis on service, warranty and quality.The public purchaser is under more scrutiny and the award process is much more transparent.
All out-going procurement documentation along with the bidding procedures are typically managed by the purchasing department. They are the keepers of the bid list or vendors in good standing, the issue and closing date of the bid and all other commercial aspects of the bid.