Competitive Bidding.

PRESENTED BY:
NAME : IQRA SHAKEEL.
ROLL NO: 18.
SEMESTER : 8TH.
 Contents.

 Definition of Competitive Bidding.

 Process of Competitive Bidding.
 Advantages of Competitive Bidding ;
 To the buyer.
 To the seller.
 Disadvantages of Competitive Bidding.
 Definition :

 Competitive bidding is a form of solicitation that is used

in the procurement of goods and services.

 It is used by companies and government agencies that

require the delivery of products or services on a large-scale
basis.

 The agency or company must issue a form of

solicitation, commonly referred to as a Request for
Proposal (RFP) .
Process of Competitive Bidding.

 Interested vendors send their bids for consideration within

a specified period.

 The bids are sealed to increase the confidentiality of each

vendor’s proposal. After the expiry of the bid submission
period, the recipient of the bids then selects the bidder with
the lowest or best terms for the RFP.

 The selection can be done in an open or closed bidding

process.
 Process of Competitive Bidding.

Buyer’s Viewpoint on Competitive Bidding.

 Identifying the most qualified vendor.

 From the buyer’s side, competitive bidding serves to
identify the most qualified vendors of particular goods and
services.
 The buyer or recipient of bids must prepare a complete RFP
and publish it, so that it reaches qualified vendors.
 Process of Competitive Bidding.

 Evaluating the bids

 After the company receives the proposals, it must evaluate
each bid depending on the information provided by each
vendor.
 The evaluation process may also involve conducting face-to-
face interviews with the bidders to determine the most
qualified one.
 The buyer will then choose the winner and invite the winning
vendor to work on the project.
 Advantages

1. To the buyer :

 Competitive bidding helps the buyers get the best price and
contract terms for their proposals.
 It allows them to get the most qualified sellers of products
and services while keeping costs low.
 They also get to work with sellers with a history of
achievements and that are qualified to deliver specialized
services.
 Advantages.

2. To the seller :

 Competitive bidding allows sellers to execute proposals they

are familiar with and at a rate that they determine.

 It allows them to save on costs that they could’ve used to

find potential buyers for their products or services.
 Disadvantages .

 Leading suppliers may not tender.

 Barriers to communication between supplier and customers.

 Safety shortcuts.

 Use of cheaper, inferior quality materials and/or labour.