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

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

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.

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.

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. 

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.

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%)

Thanks 

I agree with the answers which given by colleagues 

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

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.

Thank you for the invitation

Thank you for answering valuable and useful Greetings to all

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.