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Specifications
The first step in the bidding process deals with coming up with the specifications for the job. The company or customer looking for bids has to develop specifications for the bidding process. For example, if the customer needs a building constructed, a schematic or blueprints must be developed first. All of the details for the entire project must be outlined in the documentation.
Request for Bids
After the details of the project have been developed, the customer must request that bids be made. This can involve sending out invitations to bid on projects and posting the opportunity online. In some cases, the client will only request bids from a pre-selected list of contractors. In other situations, the bid opportunity may be open to anyone who qualifies to bid on it.
Related Reading: Steps in the Second Stage of the Payroll Process
Bidding
After the information about the project has been distributed to contractors, the bidding process begins. The bidding process can differ, depending on the rules set by the client. In some cases, sealed bids will be submitted and the customer will evaluate them. In other cases, a more informal bidding process will be involved in which contractors simply give a total amount that they can do the job for.
Reviewing the Bids
The customer will typically set a deadline on when the last bids will be accepted. Once that deadline is reached, the customer will begin reviewing the bids. The length of time that it takes to review the bids could vary, depending on the number of bids received.
Awarding the Contract
After the bids have been thoroughly reviewed, the customer will award the contract to one bidder. In most cases, the bidder with the lowest bid wins. In some situations, the bidder will award the contract not only on price but other factors as well. For instance, the customer may be inclined to go with a more reputable provider or with those where a prior relationship exists.
