5 Essential Facts on How to Prepare Competitive Bids, Quotations and Proposals
Passing the exam for the Certified Professional in Supply Management is not as easy as you think. You have to go through and succeed three sets of exams.
The first part of the CPSM exam is focused on the Foundation of Supply Management, which involves the following:
a) Contracting and Negotiation
b) Cost and Finance
c) International Supply Management
d) Social Responsibility
f) Supplier Relationship Management
This part requires you to answer 165 questions within 2 hours and 45 minutes. Thus, you need to be very quick and precise when you take the exam.
You don’t have to panic! Remember that it is not impossible to ace the CPSM Exam. All you have to do is dedicate your time and effort in reviewing for the said test.
The first thing you need to study is all about Contracting and Negotiations. Keep in mind that this topic is broad and a little bit tricky!
This article will guide you on the essential facts that you need to know on how to prepare a competitive bid, quotation, and proposal.
Soliciting Competitive Bids
The practice of soliciting competitive bids and proposals stimulates the competition among prospective suppliers. For the process to become successful, there must be a sufficient number of suppliers that are willing to do additional business.
Competitive bidding takes place in a lot of sectors in the industry and the government for the procurement of goods and services. The buyer usually solicits vendors to present proposal to meet their prescribed specifications.
These solicitations are referred as requests for proposal (RFPs) or requests for quote (RFQs). Vendors or sellers present their bids in a written form after the discussion with the buyer.
Essential Things a Bid Solicitation Should Contain
A solicitation for competitive bid, quotations and proposal is very crucial and it should contain pertinent specifications, terms and conditions. Please take note of the following guidelines when sending out solicitation bids to your suppliers:
Specific and detailed
It is very important to give specific requirement details to your bidders. Include the comprehensive description of the required products and/or services, date of delivery, and the delivery location of the said products or services.
Don’t forget to send the same information and business requirements to each bidder.
Prepare Terms and Conditions
Prepare terms and conditions for the purchase order as you send out solicitations for competitive bids, quotations, and proposals. Some, potential bidders may require you to send this kind of document.
Provide Contact Details
Make sure that all your solicitations contain your contact details, such as name, phone number, and e-mail address so that your suppliers can contact you when they have questions regarding your requirements.
Define Bid Submittal Date
Clearly define the submission instructions of the proposal, submittal date and time.
Rule of Three
For negotiation purposes, it is recommended that you should obtain at least three quotations from qualified sources of supply. This will be in support to supplier diversity.
Once you get hold of the bids, analyze the proposals and determine which supplier is capable of meeting all business and delivery requirements.