Sealed Bids vs. Competitive Proposals

Sealed Bids vs. Competitive Proposals As part of their job description, contracting officers have to make a wide range of decisions relating to procurement. One of these decisions is whether to use competitive proposals or sealed bids. In this text, I compare and contrast competitive proposals and sealed bidding. In so doing, I will amongst other things discuss the most advantageous method from a contractor's perspective. Sealed Bids vs.

Competitive Proposals Before discussing the most advantageous method from a contractor's perspective, it would be prudent to come up with a clear and concise definition of the two terms.

Sealed bidding in the words of Murphy (2009) "is a process by which government needs are made known by a solicitation called an Invitation for Bids (IFB)." On the other hand, competitive proposals according to the author should be seen as a "process by which government needs are made known by a solicitation called a Request for Quotation (RFQ) or a Request for Proposals (RFP)" (Murphy, 2009). In regard to sealed bids, price remains the main criterion when it comes to the evaluation of a procurement response.

As Sollish and Semanik (2012) point out, a sealed bid is most appropriate when there exists a need to guarantee an equitable award to the contractor who emerges as being the most appropriate from the perspective of price. Therefore, this method could be most beneficial to contractors adopting a cost leadership strategy. Such a contractor could essentially be offering its services at prices that are essentially below the industry's average prices. In that regard, the said contractor stands a far greater chance of clinching the bid.

This is more so the case given that in sealed bidding, exact performance specifications are usually stated clearly. The contractor thus knows what is required beforehand. It is also important to note that when it comes to sealed bids, other factors including but not limited to the level of technology utilized do not usually influence the decision as to who is awarded the contract. This is in contrast to competitive proposals where other reasons apart from price could easily allow for the selection of the second best offer.

Further, in contrast to sealed bidding, competitive proposals require bidders to specifically demonstrate not only their knowledge but also their expertise in the area of interest. In that regard, while sealed bids could benefit new entrants, more established firms are more likely to sail through in a competitive proposal. Thus from a contractor's perspective, the most advantageous method in this case could largely be dependent on a number of factors including but not limited to the competitiveness (in terms of experience and expertise) of the firm concerned.

It can also be noted that the selection of either method could benefit or complicate a contractor's situation. For instance, while contractors in the construction industry would favor sealed bids, contractors in research and development fields may find competitive proposals more favorable. This is more so the case given that when it comes to research and development contracts, specifying associated costs could be somewhat challenging. In the final analysis, the relevance of utilizing the.