Question

what is the difference between these two procurement method; open international competitive bidding and negotiating with
reputable companies.
Also their advantages and disadvantages

Answer 1

Differences – The open international competitive bidding is the procurement method in which the procurement entity internationally advertises their requirement for goods. Contract is awarded to the bidder that has the best bids and the best contract terms. In an open international competitive bidding the procurement agency enjoys freedom with regards selection of winning bids.

Negotiating with reputable companies, on the other hand, does not involve any bidding but involves only negotiation. Reputable companies have the ability to drive down costs or develop disruptive technologies. Terms of negotiation includes delivery time, payment terms and quality of goods being procured.

Advantages and disadvantages of open international competitive bidding: In terms of advantages open international competitive bidding leads to best value of money for the buyer as it leads to competition between suppliers. Secondly the level of transparency is high and favoritism can be avoided. In terms of disadvantages the open international competitive bidding process is burdensome as all bidders and their bids have to be assessed. The second disadvantage is that this method limits serious participation due to low chance of winning by the suppliers.

Advantages and disadvantages of negotiating with reputable companies: The most important advantage of negotiating with reputable companies will enable the procurement company to mould and shape the terms of contracts as per their requirement. In terms of disadvantage this method has low levels of transparency and as such can tend to encourage favoritism.