Tuesday, July 15, 2014

Issues to Consider in Electronic Bidding Solutions

More and more public agencies are exploring or actually receiving bids electronically, and there are a host of software solutions to manage receipt of bids electronically.  The following is a checklist of some of the issues to consider when evaluating electronic bidding solutions: 

Legal authority:  Do your state or local laws permit electronic bidding?  Some laws permit it for goods, services, and construction, while others prohibit it altogether or restrict it to certain procurements. 

Bid guaranty:  If you require a bid guaranty (bid bond, cashier's check, certified check) as part of the bid submittal, how does the electronic bidding solution address bid guaranties?  Is this solution consistent with your state and/or local laws? 

Signature:  How do bidders "sign" the bid and agree with all of the provisions of the bid documents? 

Conditioned bids:  Make sure the software system does not allow bidders to qualify or condition their bid. 

Bid form:  How easy is it for a public agency to set up a bid form on the software, especially for complex bid forms with schedules, unit prices, additives, alternates, allowances, and sales tax (if applicable)? 

Integrity:  What security tools does the system software provider use to prevent manipulation of bid prices by a hacker, bidder, or the public agency? 

Disclosure:  What security features does the software have to ensure that bid amounts are secure and not subject to disclosure prior to the bid submission deadline? 

Tested by time:  How long has the system been in use, and what is its track record on security issues?  Check references of other agencies who have used the system before deciding to sign up for it. 

Transparency:  How are bids "opened"?  Does this occur in a public setting?  How does the system promote transparency of the bid process? 

Cost:  Who pays for the use of the system?  The bidder (all bidders or just the low bidder) or the public agency?  Regardless of who pays directly, ultimately the public agency will pay for the service, even if it means that the bidder simply includes the cost of using the system in their bid price. 

Small contractors:  Are small contractors technologically savvy enough to use the system?  Will electronic bidding reduce the number of bidders and have a corresponding increase in bid prices? 

Non-local contractors:  Will more non-local contractors submit bids?  How does this impact a local agency's policy to encourage or provide bid preferences to local firms?  

Small public agencies:  Do small public agencies have the technological expertise to use electronic bidding?

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

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