Procurement

Student Name
Student Number

Module 10
Bid Openings

You are the procurement manager for a large municipality who has issued a formal invitation to bid (ITB) to supply fire equipment to your municipality, which are critically needed by the growing community. The budget estimate for the equipment is $2,200,000.00 (2.2 million) and you are hoping for a high degree of competition and good bid pricing.

As is your policy with formal ITB’s, a public notice was issued for this opportunity and your agency notified directly several suppliers who sell fire trucks. The bid was “on the street” for three weeks, so you feel that all bidders had adequate time to prepare a quality bid.

On the day of the bid opening, your agency had received four sealed bids. All bids are marked in accordance with the instructions in the ITB and have been locked in a cabinet until bid opening. Bid opening is at 2:00pm, so you gather the bids that were received and proceed to the bid opening room at 1:50pm. Accompanying you is your procurement assistant who will write down the bid results as you read them aloud. Two of the bidders have elected to personally attend the bid opening, and the assistant fire chief of your agency is also in attendance.

As is your practice, you open the bids one at a time and read aloud the bidder’s name and bid amount for each piece of fire equipment (Fire engine, fire pumper and ambulance). The bid results are as follows:

Bidder
Fire Engine
Fire Pumper
Ambulance
TOTAL

A
$1,200,000
$700,000
$350,000
$2,250,000

B
1,400,000
620,000
290,000
2,310,000

C
1,050,000
575,000
360,000
1,985,000

After reading the bid amounts, you thank the attending bidders for their time and let them know a formal announcement will be forthcoming. Bidder C realizes that his company submitted the lowest price overall for the fire equipment. Before leaving he smiles and says “my boss is going to be very happy and he hopes to see the purchase order soon.”

When you return to the procurement offices, one of your senior buyers approaches you with an envelope. It is marked with the bid number of the fire equipment ITB and is unopened. Apparently, a procurement staff member placed it in the wrong cabinet. The assistant fire chief is with you and anxious to open this bid. It is from a company he is familiar with and knows they provide quality equipment and services.

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