What is Open Bid?
Open Bid is an optional feature that allows the buyer to open up the estimating process so that all suppliers estimating a project can see the other prices being offered. This gives suppliers the opportunity to re-quote a job to be more competitive.
Note: While suppliers can see other prices being offered, they cannot see the names of their competitors.
What is an Initial Bid? (Open Bid)
The Initial Bid is the maximum price the buyer is willing to pay for the project. The buyer sets the initial bid in the Open Bid RFE. Suppliers must use the initial bid as the starting point for their estimates. They cannot enter prices higher than the initial bid amount.
What is a Price Decrement? (Open Bid)
A price decrement is the amount by which a supplier must discount any subsequent estimate when they re-quote a project. Buyers can use price decrements to avoid bidding wars based on insignificant price differentials.
The nature of price decrements varies.
- A price decrement can be a fixed amount or a percentage.
- A price decrement can be based on an individual supplier's previous estimate or on the lowest overall estimate provided so far.
The price decrement, if requested by the buyer, appears on the RFE.
FAQ: Open Bid
Open Bid is an optional feature that allows buyers to enable estimators to see prices submitted by other suppliers.
How can you tell if an RFE is Open Bid?
The phrase This RFE is Open Bid appears at the top of any RFE that is Open Bid, and an Open Bid Summary appears at the bottom of the RFE.
How do I know whether to use percentage or amount for my price decrement? (Buyer)
A monetary price decrease is a set figure and may be harder to meet as the price goes down. A percentage is more accurate across a range of numbers.
What's the difference between "next bid based on individual suppliers" and "next bid based on lowest bid overall"?
"Next bid based on individual suppliers" allows each individual supplier to use their last estimate as the starting point for their next one. This means that a supplier isn't required to meet the lowest estimate submitted so far in order to resubmit a price. This method is recommended for buyers who select suppliers based on relationship more than on price.
"Next bid based on lowest overall bid" will ensure you get the lowest prices, but it might prevent certain suppliers from submitting additional estimates. This method is recommended for buyers who select suppliers primarily on price.
Can I change an Open Bid RFE back to a regular RFE and prevent suppliers from seeing each other's prices? (Buyer)
No. Once Open Bid has been enabled on an RFE, it cannot be un-enabled.
Can I change a regular RFE into an Open Bid RFE? (Buyer)
No. If you to change an RFE to Open Bid, you should create an entirely new RFE and enable it for Open Bid.
How do I review estimates and place orders on an Open Bid RFE? (Buyer)
You review estimates and place orders the same way you do for a regular RFE. The only difference when you use an Open Bid RFE takes place during estimating, in that suppliers can see each other's estimates. Everything else works the same.