The process of competitive bidding plays various key roles when procurement
professionals evaluate options for securing supply and ensuring the best value
is reached from the supply base. One of the primary roles of the bid analysis
process is ensuring that both cost and price are understood by the procurement
professional so that optimum balance can be achieved.
In today’s globally competitive business environment, organizations
continually seek ways to cut costs and add value. Integral to this are the
agreements between the buying organization and its suppliers. Bid analysis is
a technique used to compare competitive offerings from various suppliers with
the objective of selecting one of the suppliers for award.
Selecting the best overall competitive offering for a product or service is a
key responsibility of the procurement professional, as it offers a vast array
of information that drives an objective supplier selection process. If done
properly, the bid analysis process enables the buying organization to contract
with the supplier that offers the best value: a combination of price and cost,
quality, and performance. While all the elements of value are important to
achieve when conducting a bid analysis, the procurement professional must
thoroughly understand how to evaluate both supplier costs and their drivers
and how those costs impact the suggested pricing.
After completing this course, you should be able to: