Procurement Bidding Process: What You Should Know Now

If you’ve ever wondered how organizations choose the right suppliers fairly, transparently and without wasting money, you’re thinking about the procurement bidding process.

Whether it’s a one-time purchase or a multimillion-dollar project, the bidding process helps ensure that companies don’t just pick the cheapest option but the best fit for the job.

From open tenders to selective bidding, different approaches exist, each suited to specific needs.

In this blog post, we’ll break down the procurement bidding process, explore types of bids with examples and highlight key considerations for making informed procurement decisions.

So, What Exactly Is the Procurement Bidding Process?

Think of it as a formal way of saying: “We need something, who can give us the best offer?”

The procurement team defines what’s needed, invites suppliers to submit proposals or quotes and then selects the best one based on clear, pre-set criteria like cost, quality, experience or delivery time.

The goal? Transparency, competition and value-for-money.

Types of Procurement Bidding

✍️ Open Bidding: Any qualified company can submit a bid. It’s public, fair and great for encouraging competition.

✍️ Restricted Bidding: Only selected suppliers can bid. Useful when specialized skills or experience are needed.

✍️ Negotiated Bidding: The buyer talks directly with one or a few suppliers; ideal for complex or urgent projects.

✍️ Reverse Auctions: Think bidding, but backward. Suppliers compete to offer the lowest price in real-time.

The Step-by-Step Procurement Bidding Process

✍️ Define the Need: The team figures out exactly what they need and sets a budget.

✍️ Create the Bid Documents: This could be an RFP (Request for Proposal), RFQ (Request for Quotation) or ITT (Invitation to Tender) as well as the evaluation criteria.

✍️ Invite Suppliers: Depending on the strategy, this could be public or limited to a few trusted suppliers.

✍️ Evaluate the Bids: All proposals are reviewed based on criteria like pricing, technical ability and compliance. Scoring systems help keep the process unbiased and objective.

✍️ Award the Contract: The top supplier is chosen and contracts are finalized with care and due diligence.

✍️ Manage the Contract: Even after the deal is signed, performance is monitored to make sure the supplier delivers as promised.

 Real-Life Examples of Bid Types

To bring it home, here are some practical examples of how bids work:

✍️ Fixed-Price Bids: The price is set from the start, great for IT projects or construction work.

✍️ Cost-Reimbursable Bids: Covers the actual costs plus a fee; often used in research or development projects.

✍️ Unit-Price Bids: Pricing is based on individual units; helpful for bulk supply deals.

✍️ Lump-Sum Bids: A single price for the whole job; common in turnkey projects.

If you’re involved in procurement (or want to be), knowing how the procurement bidding process works is key. It helps you make better decisions, avoid common pitfalls and build long-term value through strategic supplier relationships.

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