Unpacking Collaborative Bidding: Harnessing the Potential of Supplier Collaboration While Still Using a Competitive Bid Process
Everyday hundreds of organizations conduct competitive bids to pick the best supplier to meet their needs. In their quest to streamline the RFP process, many organizations develop rigidly standardized RFP processes.
Unfortunately, while streamlining may be effective in terms of helping an organization get through the supplier selection process faster, the lack of flexibility can be frustrating. We believe a key cause of frustration stems from organizations using the wrong tools for the wrong job - which can result in selecting the wrong supplier or developing a contract that is misaligned with the organization's objectives. Simply put, using the wrong competitive bidding method is like putting a square peg in a round hole.
Forcing it to fit is myopic and inefficient. University of Tennessee researchers began exploring competitive bidding methods in 2012. The research led to two white papers. The first is a practitioner-oriented white paper that defines the what, when and why of the various competitive bidding methods.
This white paper builds on the first, and includes the following six sections: - Part 1 provides an overview of our research methodology. - Part 2 provides insights into the changing landscape of strategic sourcing. In this section we explore some of the most prevalent trends that impact strategic sourcing and show why procurement professionals need to challenge their thinking and embrace more collaborative techniques. - Part 3 "unpacks" the various RFX methods and shares pros and cons to each method. - Part 4 offers an alternative collaborative bidding process (Request for Partner) - that can be used when an organization needs to have a highly collaborative competitive bidding process. - Part 5 shares a case study of how Vancouver Coast Health applied collaborative bidding methods for outsourcing environmental services. - Part 6 provides our conclusion to our research methodology.
We conclude the paper by challenging procurement professionals to, when appropriate, embrace more collaborative methods for competitive bidding that are purposely built to enhance supplier interaction and drive innovation in outsourcing.