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Suicide Bid
Suicide bidding is a response to a tendering exercise in which a potential supplier, anxious to win business, submits a proposal to carry out the work for less than it will cost. These procurement processes are typically modelled as reverse auction, reverse sealed-bid auctions with the lowest bid winning. The motive for such bidding is to keep the company's skilled labour employed, even if the project only break-even, breaks even or makes a loss. This can result in poor quality work, poor service and debates over loopholes in contract wording in attempts to charge clients extra, or even insolvency on the part of the contractor. The practice has particularly been noted in construction bidding. Around 2010, suicide bidding was widespread due to the Great Recession, economic crisis and strong competition. 2010 survey by the Chartered Institute of Building found that 82% of respondents believed that “suicide bidding” existed within the industry. It was considered to have contribut ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tendering
An invitation to tender (ITT, otherwise known as a call for bids or a request for tenders) is a formal, structured procedure for generating competing offers from different potential suppliers or contractors looking to obtain an award of business activity in works, supply, or service contracts, often from companies who have been previously assessed for suitability by means of a supplier questionnaire (SQ) or pre-qualification questionnaire (PQQ). The term "notice inviting tenders" (NIT) is often used in purchasing in India. An ITT differs from a request for quotation (RFQ) or a request for proposal (RFP), in which case other reasons (technology used, quality) might cause or allow choice of the second best offer. An RFP is a request for a price from a buyer but the buyer would also expect suggestions and ideas on how the project work should be done. RFPs are thus focused on more than just pricing/cost, they entail a bit of consulting from the contractor or vendor. The closest equi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
