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AboutRead In 4 Minutes
Navigating The RFQ/RFP Bidding Process
Many companies that purchase materials – or subcontract out work – for their construction projects, will engage in a competitive bidding process where they issue requests for quotes (RFQ/RFP), to get the best price and value.
Depending on what is being purchased, soliciting multiple bids from vendors can either be a straightforward process of comparing pricing, or a very exhaustive evaluation of technical specifications, fabrication details, drawings, commercial terms, delivery, etc.
Regardless of where your business is on that spectrum of assessing the best option, there will be an evaluation process to help select the vendor of choice in each case.
4castplus project procurement provides multiple tools within the RFQ module that enable a range of methods for defining, capturing, and reporting on bid evaluations. These evaluation tools can leverage various benchmarks from price to compliance to drawings; along with shipping, vendor ranking, terms, and capacity of their fabrication shop. These analysis tools are meant to enable an objective methodology for thoroughly comparing and analyzing bids and proposals from multiple vendors. Your team can uniquely customize the criteria they use for each RFQ, while also setting standards across the board.
Not all organizations may need the extensive options available, so they can elect to pick only those that make sense – or bypass them altogether. If you’re a civil contractor, you may, for example, need to secure a reliable supply of asphalt to be delivered to various locations at various times along the road you’re building. When creating the criteria for your RFQ, you’ll likely only include price and reliability as the key variables. There’s very little need for a formal evaluation process. Nonetheless, there is still a need to solicit competitive bids to get the best option.
Engineering-driven procurement, on the other hand, will more commonly include a much more formal analysis that can encompass both commercial and technical evaluations, along with fabrication details, formal drawings, logistics, expediting, and much more. This is often performed by a whole team and will also involve the need to route the whole project for approval. An approval that can include engineering, finance, and often the client.
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Objective Bid Evaluation & Vendor Selection
This is where 4castplus software can help. Our software is instrumental in creating a set of standards and practices to ensure that a set of objective parameters are defined and followed. Which is partly intended to remove the subjective nature of competitive evaluations. It’s key to pre-establish the standards by which the bids are compared; and then use a defined process to determine which vendor is handed the award. It’s vital to take away much of the subjectivity and follow the objective rules for awarding contracts. It is also important to be transparent to the client, the vendor, and other stakeholders as to what those rules are.
The screenshot above shows the RFQ module of 4castplus with the “Evaluation Criteria” subsection of a specific RFQ opened. This is one of several tools available to standardize the bid evaluation process. This particular tool enables the buyer to select multiple criteria from a configurable list and apply weighting against each criterion. The weighting indicates the criterion’s level of importance to the overall evaluation. Once the bidding process is complete and the evaluation process begins, the buyer team will be able to assign a score or ranking for each bidding vendor against each criterion. This will result in a final overall score for each vendor.
Of course, evaluation criteria are only one of several tools used for the comparative bid analysis. The buyer team has the advantage of all the submitted documents, pricing comparisons, technical specifications, shipping, delivery, freight, and on and on. There is the addition of the technical evaluation that the engineering team will need to undertake to ensure that what is being fabricated and supplied meets the requirements. All of this information – and associated tools – are conveniently available in the 4castplus RFQ module. There is also a wealth of reporting that provides for straightforward comparisons of all the bidders’ submissions.
Ultimately, a vendor is chosen as the winning bidder, at which point the buyer team can “Award” the RFQ directly in the RFQ module. The award process results in copying relevant information from the RFQ over to a purchase order. Users can control the whole award process and even award to multiple vendors if applicable.
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4castplus is brimming with features to provide your team with real-time visibility and oversight on budgets, forecasts, costs, contracts, accruals and more. Don’t let the complexity of construction projects limit your ability to make an impact. Contact us to learn more.
