How to Encourage Competitive Bids Without Undermining Quality

“Let’s go with the cheapest offer.”

How many times have you heard that phrase, only to regret it later?

In procurement, competition is vital. It drives innovation, lowers costs and keeps vendors on their toes. But here’s the catch: chasing the lowest bid without guardrails can backfire. You might win on price… but lose on quality, delivery or reliability.

The good news? You can encourage competitive bids without compromising on quality, if you structure your process the right way.

 Let’s examine some practical tips to help you strike the perfect balance.

✔️ Set Clear Quality Standards Upfront: Include non-negotiable quality requirements in your tender documents. This will set minimum acceptable standards to guide the bid submissions.

Example: Specify material grades, compliance standards (e.g. ISO, relevant certifications and compliance with local regulations) and testing protocols.

✔️ Use Weighted Evaluation Criteria: Develop a scoring system that rewards both price and quality. With the knowledge that technical fit is priority, bidders will ensure their product/service solutions are fit-for-purpose.

Sample criteria:

Evaluation Criteria Weight (%)

Technical Quality 40%

Pricing        30%

Past Performance  20%

Delivery Timeline 10%

 ✔️ Pre-Qualify Your Suppliers: Run a pre-qualification stage where vendors submit credentials, past performance records, relevant certifications and capacity documentation before bidding. This weeds out underqualified vendors while still allowing fair competition among capable ones.

✔️ Encourage Innovation: Allow alternative proposals only if they match or exceed your quality standards.

How to do this:

Create two bid options:

Option A: Base your bid on specified requirements

Option B: Submit a value-engineered alternative (with proof of equivalence or superiority)

✔️ Share Budget Range Without Locking In: Where permitted, give a budget range in your tender to signal the scale, not the exact target.

Example: “This project is estimated to cost between $150,000 and $200,000. Final selection will be based on best value.”

✔️ Monitor Market Benchmarks: Stay updated on market rates through benchmarking reports, industry publications, your industry supply chain / procurement network or third-party advisors.

Quick Tip: Use this data to challenge unrealistic pricing during bid evaluation and negotiations.

Remember, in procurement, the cheapest bid is only good if it actually delivers.

Need procurement specific training? Reach out to support@efemini.com and we'll get you sorted.