subject: To Bid or Not to Bid [print this page] To Bid or Not to Bid To Bid or Not to Bid
That is the question. As the owner and founder of Goodrum International, I have done a lot of bidding over the last half dozen years; but for now, I want to put myself in my customer's shoes. If you are a purchaser for a State, County, City, or some department of the Federal Government, your whole life is buying products and services. By law, many of them have to go out for public bid; but in my opinion, it is not always the best way to go.
Depending on what agency you are purchasing for; there is a dollar level where products go out to limited bidding, and another dollar level where they intended purchase must go out for a public bid. This makes a lot of sense; and though it makes it harder to find those smaller opportunities, it is a cost savings for the agency and the taxpayers.
There is a cost involved in producing a bid. There is of course the purchaser's time, if it needs to be put online, you may also need an IT person to update the bid list. There is the delayed gratification of not opening the bid for at least a week, sometimes two or three weeks. There is the bid openings are often public, which can be a big deal. Finally, the bid tabulation must be recorded and posted. The whole process can easily be several hundred dollars. The cost to bid a hundred thousand dollar project is pretty much the same as a hundred dollar project. The difference is, it does not make sense to spend three hundred dollars to buy something for a hundred dollars.
You may think that I am exaggerating the numbers for effect; but that is not the case. I look at a lot of bid opportunities every day, and it still amazes me when I see a bid for a product that I sell, I open it up, and find out that they want one each of something. Mine is a small company; but even I have my standards. One each of a battleship is not a bad sale, one each of a part that is thirty-five dollars with maybe seven dollars profit, is not worth doing. If a purchasing agent has the authority to purchase products under twenty-five hundred dollars without putting it out for a public bid, they should take advantage of it as often as possible.
My business used to be one hundred percent based on winning bids and contracts; but with the predominance of the internet, I predict that more and more purchasing will take place online in a non-competitive fashion. Why put out a bid for office supplies, when you can order online, and the local office supply chain will deliver for free with very low minimum orders. The more expensive and more complex the product, the less like it is to be sold directly online; but for products with relatively few options, online is starting to become the preferred method of procurement. For public agencies that purchase a lot of small dollar products, public bidding just does not make sense.
