Definition of the current bidding situation
The current bidding situation involves the purchase of a custom formulated ingredient referred to as X-PAND that is used in the manufacture process of plastic. This particular product in necessary for the manufacture as well as packaging at Tiger Plastics,therefore, the company has specifically in this case approached this buy decision purely as a transactional one and therefore involves itself in an annual contractual bids on a price-only basis. Just as was the case in the previous years, a company employee named Sue issue has issued an RFQ to the company’s five qualified suppliers and requested them to suffice the company with a quote for the purchase of the product (X-PAND) for an annual contract. All of the bid responses are to assume a standard requirement of about 12,500 drums annually and these are to be to delivered to the company’s Plastics’ plant located in Birmingham. The following information is contained in the bid quotes as per the RFQ schedule.
X-PAND QUALIFIED SUPPLIER Price / DrumDelivery Charge
Alabama Chemical $ 312.00 $5.50 per drum
Rocket City Industries $ 297.00 $8.25 per drum
Mobile Plastics $ 323.00 $9.00 per drum
Quad-Cities Chemical $ 332.00 $8.50 per drum
Montgomery Supply, Inc. $ 340.00 $7.25 per drum
As is evident, the decision to automatically award the tender to Rocket City again was rather an obvious one. The only problem with the company is that setup fee meant that it never cared about the setup integrity of the process as it was possible that this was never upheld.
Contrasting the current bidding situation with the initial process five years ago (AS-WAS to AS-IS).
The current bidding situation is performance-based bidding while the initial bidding was price-based bidding. In the current system, the integrity of the bidding process comes first then the pricing while in the initial process it was the pricing that came first.
