WHAT IS COMPETITIVE BIDDING?
Competitive bidding is a term that can be associated with opportunities and business proposals. In simple words, competitive bidding is a price quotation or business proposal which is submitted to a solicit firm or organization to get business. Mostly these proposals are submitted to take the opportunity to do business by providing certain products or services to request a firm or organization seeking to get some work done.
Competitive bidding brings some of the leading suppliers to one table to get business from the clients. The whole process of competitive bidding is carried out mostly in case of significant scale work for an estimated period.
UNDERSTANDING COMPETITIVE BIDDING:
Competitive bidding involves two or more companies trying to seek the opportunity of providing their products and services to another company or organization. In layman’s language a competition between the two companies to win business from one client.
When a company or the government needs some product or a particular service, they publish a solicitation in the form of a request for proposal (RFP). Then the companies come up with their best plans and compete with the others in terms of price, quality and completion time.
PROS AND CONS OF COMPETITIVE BIDDING:
To win in competitive bidding, the companies or the suppliers will have to be at the top of their game. They need to make sure they are offering the best in terms of price and quality. One of the most significant advantages of competitives bidding is the competition itself. Due to this competition, the suppliers push themselves to provide the best. Also, it encourages the value of money and quality.
In these competitives biddings, the client, which can be any individual, company or government, publishes a solicit or advertisement. Because of this advertisement and solicit, the companies get a fair chance to participate in the bidding. Moreover, there is no bias. The best offer wins the tender.
The bidding process is expensive. To place a bid, the companies need to spend a certain amount of money, which is not reimbursable. Sometimes it can be a considerable amount. So, there are instances where companies step back from competitives bidding.
EXAMPLES OF COMPETITIVE BIDDING:
Competitive bidding is not rare. There are many real-world examples. One of the examples is government projects. If the government is willing to make some work done, then it launches a solicit. Now the suppliers and companies working in that particular field of work bid on the project. They are required to fill some bidding documents and deposit the mentioned bidding amount. On a specific day, the government announces the winner and handovers the project to that company.
Competitive bidding is a procedure that ensures the value of money and quality. The competition amongst the bidders encourages them to do their best. Also, competitives bidding is the stepping stone of an excellent quality work project.