Lowest-price bidding

Suppliers had previously been informed of future plans on a need to know basis through their organisational gatekeepers in the purchasing department at Cymru. New work was put out to tender, and the lowest-price bid secured the business. 

Most large organizations, particularly in central and local government, have set procedures in the form of standing orders, and this area is usually of most interest to internal and external auditors. The object of inviting competitive bids is to obtain the lowest price for the job, based on a fair method, which enables every bidder to bid for the same thing. 

Painting is generally performed by a contractor on a bid basis. Unless another agreement is made, a contractor will furnish the lowest priced paint that will do an acceptable job, even though it may have inferior durability. To avoid this, the contract should be very specific with regard to the type of paint to be used. It may even specify a certain brand. 

This solution breaks down where the market is too small to support more than one or two entrants. In this case, sponsors should award competitively bid contracts to whichever manufacturer offers to sell drugs at the lowest price. 

In some marketplaces and under many contract bid situations, there is an unfortunate tendency by some buyers to purchase water treatment programs based solely on the chemical product unit price, or to select only the lowest priced vendor, without consideration of any other factors. This practice is undertaken for various reasons. It may be, perhaps, because of cultural differences in negotiating practice, or because of simple ignorance of the value of the service supplied, or the belief that all chemical formulations are the same, or, alternatively, a failure to comprehend the concept of matching an overall and comprehensive service program specifically to a customer s needs. 

The task being auctioned is therefore assigned to the robot that submitted the lowest adjusted bid price, based on (7.3). As such, this closed-loop bid adjustment mechanism can improve bidding accuracy, considerably enhancing the overall team performance. 

However, having to compete and share business with others, paradoxically, adds uncertainty and reduces incentives to work hard at lowering cost. So one has to balance the need for lowest price against the need for lowest cost. The difference is that lowest price, as bid against others, may not result in the lowest cost. This is because the low bid comes with unseen costs such as quality and delivery problems — and an unwillingness to work to lower overall costs. 

A number of criteria can be used to select clinics for participation in the scheme. The first is cost. Providers can be asked to bid those offering the lowest bids can be selected. Alternatively, a benchmark price can be established, and clinics offering to provide services to a larger population at that price can be selected. 

Alternately, bought deals are common in good market conditions, especially for smaller transactions. Under this structure, a small number of banks bid for the bonds being offered for sale by the company. The bank offering the highest price (i.e., the lowest yield) wins the mandate... 

In an auction, a set of tasks are offered by an auctioneer in the announcement phase. Broadcast with the auction announcement, each of the robots estimates the cost of a task separately and submits a bid to the auctioneer. Once all bids are received or a pre-specified deadline has passed, the auction is cleared. In the winner determination phase, the auctioneer decides with some selection criteria which robot wins which task [9]. This chapter adopts cost minimisation, in that an auctioned task is awarded to a robot offering the lowest bid price. 

Step 3 The auctioneer assesses all the bid prices received and awards the task to the robot offering the lowest bid price. 

As we proceed, however, those important project elements we omitted to yield the lowest bid, simply do not go away. They are now planted in our subconscious mind and keep creeping into our conscious mind. We try to clip them but many of us, remembering what we left out when preparing the price-base proposal and possibly driven by ethical concerns, succumb to the temptation to put some of those valuable elements back into the project. 

From the buyer s perspective, the purpose of an auction is to get bidders to reveal their underlying cost structure so the buyer can select the supplier with the lowest costs. A commonly used mechanism that achieves this outcome is the second-price (Vickrey) auction. In this type of auction, each potential suppher submits a bid and the contract is assigned to the lowest bidder— but at the price quoted by the second-lowest bidder. In general, it is in the buyer s interest to... 

A significant factor that must be accounted for when designing an auction is the possibility of collusion among bidders. Second-price auctions are particularly vulnerable to collusion. If there is collusion and all bidders but the lowest cost bidder raise their bids, the contract goes to the lowest-cost bidder, but at a high price. Firms must take care to ensure that no collusion occurs when using an auction. 

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