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What are the reasons of taking at least three bids/quotations in procurement other than ensuring effective competition?

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Question added by Md Fazlur Rahman , Procurement Specialist , Engineering and Planning Consultants Ltd
Date Posted: 2017/03/01
Hussain  Alshagrawi
by Hussain Alshagrawi , Freelancer Consultant , Freelancer

It is always recommended to obtain most economical number of quotations to :

> Take advantage of competitive environment

> Use the variation of terms for negotiation

> To assure ethical and professional manner

> To explore more options and alternatives for your demand

 > Expand your technical experience as PPO on the different ways of specs and SOW presentations

Sharpstone Garande
by Sharpstone Garande , Automotive Aftersales Manager , AUTOWORLD ISUZU

The world is wide and companies differ in what they offer. It is always good to solicit for the best supply tenets for the right total cost of procurement. Besides, three quotes ensures some modicum of  transparency. The reasons though are intertwined but the whole crux is to get the five rights.

Abdul Khader Nagoor
by Abdul Khader Nagoor , Material Planning Manager , Cisco Systems - India

1. Able to analyze cost between the supplier

2. Able to analyze the lead time

3. Able to analyze the trust ability of the supplier

4. Able to analyze and choose the right supplier even the price is high but the quality and lead-time is good.

Sathish Kumar Rajamani
by Sathish Kumar Rajamani , Sr.Estimation Engineer (Mechanical) , M/s. ABJ Engineering & Contracting Co. KSC

It is depend on Bid or Awarded project from client.

If it is bid we can go the higher value price circumstance of  unknown project start date tentatively.

If it is awarded project we need to ensure the delivery time for three competitors and we can go least price for competition. 

Syed Zeeshan Faheem
by Syed Zeeshan Faheem , Supply Chain Director , VAMED Middle East Healthcare Consulting

Competitive bidding process or acquiring quotes for competitive bids is an effective tool in ensuring value for money. This also shows transparency of the system.

If you want to remain unbiased then always go for competitive quotes.

Md Fazlur Rahman
by Md Fazlur Rahman , Procurement Specialist , Engineering and Planning Consultants Ltd

Thanks for excellent answer provided by colleagues.

Having more bids reduce the probability of "Collusion"  by the suppliers/ cartel group. Economic analysis shows that  having three bids reduce the probability of Collusion by sixty six percent (66%)

Omar Saad Ibrahem Alhamadani
by Omar Saad Ibrahem Alhamadani , Snr. HR & Finance Officer , Sarri Zawetta Company

Thanks 

I agree with the answers which given by colleagues 

Krishna   KHASANIS  PMP
by Krishna KHASANIS PMP , Project Manager-Electrical , Larsen & Toubro Ltd, P T & D (International)

Ensuring effective competition is the by product  ; primary concern of getting minimum three bids / quotation is to get good quality work at fair price.

Manzoor Alam
by Manzoor Alam , Director , 7th Sky Travel & Tourism Services (Pvt.) Limited

It helps your to compare the costs as well as it all depending on your skills to locate or find out the best possible realistic cost and reliable source.

يوسف دمدوم
by يوسف دمدوم , مهندس و مسير , مقاولة اشغال البناء

Thank you for the invitation

Thank you for answering valuable and useful Greetings to all

Nadeem Asghar
by Nadeem Asghar , Supply Chain Consultant/Trainer , Independent Practitioner

I absolutely agree with Sharpstone Garande that other than obtaining competitive offers, the purpose of obtaining multiple quotations is to ensure Transparency in the process.

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