When analyzing and evaluating the various proposals that you receive from vendors during an RFQ bidding process, what benchmarks do you use? Do you just compare price, or do you also have a list of criteria to compare the bids? Criteria such as: Compliance to Terms and Conditions, Shipping, Reliability, etc.
How formal is this evaluation process in your organization?
Are your RFQ evaluations – and decision around who is awarded the bid – subject to approval by your client?
In 4castplus, the Bid Evaluation module allows users to define their own criteria; and go on to weight each criteria element according to its importance to the whole bid analysis. For example, if it’s a schedule-driven project where timing is critical, perhaps you’d weigh Delivery Date as having high importance.
Not everyone needs software to help rank and evaluate bids like that. It’s often the case where it’s a straightforward process of eyeballing the bids and making a judgement call. Nevertheless, many organizations that we work with have historically struggled with this area of bid management. Especially when any of the following are true:
- You’re providing procurement services on behalf of your client, and there is a requirement for bid-award oversight by the client
- The RFQ is connected to a critical path deliverable
- The RFQ has many materials or equipment that have little or no historical benchmarks for unit cost
- You have no history with the list of vendors bidding on the RFQ. In other words: a lot of unknowns
- The RFQ is just plain complicated
In any of these types of cases (and others), it’s key to pre-establish the standards by which the bids are compared; and then use a defined process to determine which is handed the award. It’s vital to take away much of the subjectivity of a snap decision, and follow your objective rules for awarding contracts. It’s also important to be transparent to your client, your vendor and your internal stakeholders as to what those rules are.
Please leave me a comment, I’d be grateful for your input on this.