P.N.

Dandeniya
QS Level 05 BIDDING PROCEDURES
Batch: - 2023/01 (F45C002M04)
Assignment

1.How can open bidding promote transparency and fairness in the procurement process?
Answer
Open bidding, also known as competitive bidding or open tendering, is a procurement method that can
promote transparency and fairness in the procurement process in the following ways:
Equal Opportunities: Open bidding allows all interested suppliers or contractors to participate in the
bidding process. This provides equal opportunities for all potential bidders to compete for the contract.
Encourages Competition: By opening the bidding process to a wide range of suppliers, open bidding
encourages competition. This competition can potentially lead to lower prices and better quality as
suppliers strive to offer the most competitive bids to win the contract.
Transparency: Open bidding promotes transparency by ensuring that the bidding process is open and
accessible to all interested parties. This transparency helps to build trust among stakeholders and
demonstrates that the procurement process is conducted fairly and openly.
Fair Evaluation: In open bidding, all bids are evaluated based on predefined criteria, such as technical
compliance, pricing, experience, and qualifications. This structured evaluation process ensures that bids
are assessed objectively and fairly, leading to the selection of the most suitable bidder based on merit.
Documentation: Throughout the open bidding process, all interactions, communications, and decisions
are documented. This documentation serves as a record of the procurement process and can be reviewed
by stakeholders or regulatory authorities to ensure that the process was conducted transparently and
fairly.
By providing equal opportunities, encouraging competition, ensuring transparency, conducting fair
evaluations, and maintaining detailed documentation, open bidding can promote transparency and
fairness in the procurement process.

2. What are the potential risks associated with selective bidding in terms of competition and
pricing?

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Answer
Selective bidding, which involves inviting only pre-qualified suppliers or contractors to participate in
the bidding process, has certain risks associated with competition and pricing:

Limited Competition: One of the main risks of selective bidding is that it may limit competition
compared to open bidding. By restricting the pool of bidders to only pre-qualified suppliers, there is a
possibility that fewer bids will be received, reducing the competitive pressure on pricing and potentially
leading to higher prices.

Reduced Price Competition: With a smaller number of pre-qualified bidders participating in the
selective bidding process, there may be less price competition compared to open bidding. This reduced
competition could result in less competitive pricing offers from suppliers, leading to higher contract
prices for the buyer.

Risk of Collusion: In selective bidding, where a limited number of suppliers are invited to participate,
there may be a higher risk of collusion among bidders. Collusion can lead to anti-competitive behavior,
such as bid-rigging or price-fixing, which can distort pricing and undermine the fairness of the bidding
process.

3. How can a company effectively balance the advantages and disadvantages of different bidding
methods to achieve successful procurement outcomes?

Answer
Balancing the advantages and disadvantages of different bidding methods is crucial for a company to
achieve successful procurement outcomes. Here are some strategies to help companies effectively
navigate the complexities of bidding methods:

1. Understand Project Requirements: Before selecting a bidding method, companies should thoroughly
understand the project requirements, budget constraints, timeline, and desired outcomes. This
understanding will help in determining which bidding method aligns best with the project needs.

2. Evaluate Supplier Qualifications: Assess the qualifications, experience, and capabilities of potential
suppliers to determine the most suitable bidding method. For complex projects requiring specialized
expertise, pre-qualification or selective bidding may be more appropriate, while open bidding can be
suitable for standard goods or services.

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3. Consider Risk Factors: Evaluate the risks associated with each bidding method, such as competition
levels, pricing dynamics, potential for collusion, and perceptions of fairness. Companies should weigh
these risks against the benefits of each method to make an informed decision.

4. Promote Transparency: Regardless of the bidding method chosen, transparency is key to ensuring
fairness and integrity in the procurement process. Clearly communicate the evaluation criteria, selection
process, and timeline to all bidders to promote transparency and build trust.

5.Seek Stakeholder Input: Engage key stakeholders, such as procurement professionals, project
managers, legal advisors, and finance teams, in the decision-making process. Their insights and
expertise can help in identifying the most suitable bidding method for the specific project .

6. Utilize Hybrid Approaches: In some cases, a hybrid approach combining elements of different
bidding methods may be beneficial. For example, companies can use pre-qualification to shortlist
suppliers and then conduct an open bidding process to ensure competition and transparency.

7. Continuous Improvement: After completing the procurement process, conduct a thorough evaluation
of the outcomes, including cost-effectiveness, supplier performance, and overall success. Use this
feedback to continuously improve and refine the company's approach to bidding methods for future
projects.