In: Operations Management
During competitive bidding activities, why aren’t the contractors allowed to have personal conversations with the seller’s organization without informing other bidders about the discussion?
In a competetive bid, all the bidding vendors must have a fair playing ground and no vendor should have an undue advantage over the other by seeking extra information from the seller. To keep the bidding process transparent and open, the contractors are not allowed to have discreet conversations with seller's organization without informing other bidders. In a competitive bid, even if the questions are raised by one vendor the response to questions is released to all other vendors. This is to make sure everyone has the same information while preparing their bids.
If contractors do have discreet conversations withouth informing seller's organization , it inadvertently provides extra information to one bidder causing the bidding process to be less competetive and inclined in favor of that vendor. It is possible that other contractors back out from bidding when they feel process is not transparent and chances of winning are low.