RFP's,tenders, competitive bidding; they all amount to the same thing as far as suppliers are concerned: brown envelopes at dawn!

Here are some reasons why this may keep the auditors sweeet buy may not actually get you the best outcome that the market has to offer.

1.  If the market is distorted, closed bidding may reinforce collusive behaviour between the parties.  It allows respondents to have some certainty how they will each behave, as they can bid separately but in a co-ordinated fashion.

2.  Bidders will always bid the highest offer that they think will win.  Only naive buyers think that bidders quote the best terms that they can.

3.  More and more bidders are reviewing whether or not to bid.  Developing a bid is time-consuming and costly and if bid success rates are only 15-20% why bother?  Alternatively, negotiation may persuade the seller it is worth the effort.

4.  Comparing "apples with apples" may mean reducing the requirement to the lowest common denominator.  Bidders may have other sources of value that they could offer but don't in case it handicaps their bid.

5.  If a seller has to put down a market, they will usually do so in a way that gives some flexibility.  There will be some "fat".

So don't be predicable!  Bid occasionally and invite new players.  Why not vary the approach?