Conduct Procurement

[nazrulq]

Larry is the project manager and working with procurement department of his organization to do procurement for his project. Procurement department said these are usual commodities and same has been procured many time. Also as this has been procured multiple times, generally they receive response from 4-5 vendors for this procurement. To everyone’s surprise, almost 10-15 vendors responded and two of the bids are evidently lesser than independent estimate Larry has created. What can be the best explanation for lower bid in this scenario?

1.Price for the commodity in current market changed due to change in demand/supply for it

2.Procurement SOW created by buyer was not clear enough for seller to make out the requirement

3.Procurement SOW created by buyer was clear but seller understood it incorrectly resulting lower bids

4.Bid document supplied by seller is having formula mistake resulting in lower bid

Correct Answer Option 1.

I think option 2.May be bidder misunderstood the requirement.

Can Manish explain please!

[Prachi Bansal]

I would like to give my opinion here. Option 2 can't be correct since procurement SOQ which was created by Buyer was same and was sent to all other suppliers/contractors as well. Since out of 15 only 2 contractors bid low, this can't be the reason.

I would go for Option 1. That seems most appropriate to me.

[nazrulq]

More bidder this time usually 4 to 5 . That is could be the reason and two bidder have quoted very lesser price!

Can Manish explain please!