1. Which Makes More Sense For Internet Bidding – Vendor Or Agency Pay?

    by Joseph Myer
    Business Development Manager

    Info Tech currently provides more than 100 public agencies with Internet bidding and online solicitation management via the Bid Express service. In nearly every implementation, the same question comes up - who should pay for the service - those bidding on the work or the owner requesting the work?

    A good, flexible bidding service will offer both methods, so be sure to select a service that can accommodate both, and even toggle between the two if necessary. That leaves the decision in your hands, however, which can be tough.

    The bidder should pay, of course!

    When you implement Internet bidding, the bidder saves significantly. First, there is no time away from the office to travel to and attend bid meetings, to pick-up plans, and again to deliver the bid. The expenses associated with all of that travel (fuel, meals, hotel stays) are also gone.

    Preparing the bid is easier as well. The system checks the bid, so all of that time reviewing and re-checking the bid is saved. Potential math errors are gone and, since the system alerts bidders to missing documents, bidders won’t miss out on a project due to an accidental omission. This risk reduction is valuable in itself. Online bid bond validation saves a step as well. There is no need to drive to the surety office to get the paper and enclose it in the bid.

    Are your bidders using delivery services or couriers to deliver the bid? They save that money too. Even if they drive it in, they may even pay a good chunk of $25 just to park nearby. A $25 fee to submit is not an added cost of doing business; rather, it is a less expensive, more efficient way to submit a bid.

    Plus, when vendors pay for the service, the agency does not. You won’t need to budget and purchase a bidding system, so that saves a lot of the up-front hassle of using a new system in the agency.

    The owner-agency should pay, of course!

    Internet bidding saves the agency so much that absorbing the cost for the service is easy. The agency no longer has to assemble and reproduce stacks and stacks of paper bid packets. Advertising in local publications may no longer be needed, so that time and expense is saved. Plan sheet packs are eliminated, saving the time and effort for copies and even more paper.

    When an agency issues an addendum, there is no need to take the time to fax it out or attempt to email each bidder since the system will automatically alert all planholders to it, and because the bidding system automatically updates electronic bid solicitations, bidders are unable to submit bids without addenda. When it is time to open bids, the agency no longer needs a team of people opening and checking each document, reviewing it for completeness and reading the bids aloud for those in attendance. These are all done automatically by the system. Bidders stay in their offices to hear the news or get results on a mobile device while they are in the field.

    An additional consideration when offering electronic bids is the decision to continue accepting paper bids. When an agency sponsors the cost of the bidding service, the worry that smaller companies or bidders who operate in low-margin profit areas will be burdened with the cost of bid submission is eliminated; therefore, it is easier for an agency to move into Internet-only bid submission and avoid the headache of juggling electronic and paper bid submissions.

    These savings add up, so covering the cost of the service is simple. It will ensure the agency maintains strong vendor relationships. You might be covering costs for which the bidder was previously responsible, but you are ensuring access to all of your solicitations to your valued bidding community.

    Both answers are correct, of course!

    You know your situation best and you know your bidding community. Deciding between the agency-pay and vendor-pay model will take some time since there are benefits to both. You can even offer an agency-pay model for an introductory period and move to a vendor-pay model once the bidders repeatedly experience the benefits of the service.

    Our team can help guide you through this process should you select the Bid Express service.