Procurement Process: Bids, Budget Requests, and Supplier Selection

Request for Offers and Budget

The phase of bids and budget requests within the procurement process is a practice by firms in the following cases:

• When you first start the activity. The company is new and needs to find all types of providers. The first step is to study the market for suppliers of goods and services.
• When it is time to buy a new product. The first time we purchase an item, as in the previous case, we must first find suppliers that manufacture or sell the product.
• When we're not happy with the current vendors. The company wants to introduce some changes because it is not in accordance with suppliers or the business relationship with them.
• To expand the portfolio of suppliers. When the company works with a limited number of suppliers, shortages may occur through no fault of their own organization, such as delivery delays, strikes, etc.
• To respond to recent publicity. The company recently installed sends ads to inventories. When supply is in our interest, we respond to this and ask for more information.

Also, depending on the purchasing policy the company takes, there are several factors that influence when deciding to buy from the manufacturer, wholesaler, or both. These factors are:

• The type of product. The manufacturers of selection typically sell through retailers.
• The amount requested in each order. The manufacturer sells in bulk, which small and medium retailers cannot afford.
• The location of the store. Some merchants are far from the manufacturer but very close to wholesale suppliers.
• Services offered by the provider, such as transportation, installation, quick delivery, etc.

What Information Do We Ask For?

The information focuses on three aspects: economic, technical, and after-sales services.

Economic Conditions

Price per unit and lot, commercial discount, "Rappels" and their application, expenses for packaging, transport, insurance costs, payment, and deferral surcharge.

Technical Terms

Features, quality, special packaging, assembly, installation, warranty time, user training, parts, and after-sales maintenance.

After-Sales Services

Delivery, reimbursement of surplus, review of prices, and other services.