Online bid submission has been in use for the better part of a decade now. When considering an online bid submission process, owners often ask:
- What is the impact of transitioning from a paper based bid submission process to a fully online process?
- Should an Owner conduct dual closings to ensure no bidders are potentially excluded from the process?
On the question of impact primary concerns for the Owner are:
- We will receive fewer submissions because some bidders won’t like doing it online
- The cost of submitting online will deter bidders
- The process may be too complex and bidders will not be successful in completing it
- The law of bidding is based upon paper submissions so there is little or no precedent for online processes
Let’s consider each of these issues individually.
- We will receive fewer submissions because some bidders won’t like doing it online.
Wherever online bid submission has been used, the construction industry has embraced it 100%. There are a number of advantages for Bidders to utilizing an online submission process:
- They are confident the exact same process is enforced by the software for all bidders so there is no potential of an advantage arising from the process.
- Bidders are faced with serious time constraints to complete their calculations and receive all their subcontract and supplier prices prior to the closing time. In order to buy time to get the most competitive prices they send an individual to the closing location and phone the details to that person who then manually completes the form incurring the risk of completion errors.
- The submission process is significantly more efficient from a time perspective as they no longer need to send individuals to the closing location to ensure they can use every minute of the bid period without being late to submit.
- The potential for errors in completing submissions is dramatically reduced as the technology performs error checking which ensures the Bidder submits a fully compliant tender submission.
- The cost of submitting online will deter bidders.
In actual online bid conditions this has not proven to be an issue. Bidders immediately recognize the time and cost savings of submitting a bid online. Eliminating the real costs of couriers, paper and envelopes, the time and vehicle expenses of personnel to drive to a closing location and parking are more than offset by any fee to submit online.
Post bid surveys of bidders who submitted online indicate an almost unanimous response that fees are reasonable and given a choice bidders prefer online bid submission.
- The process may be too complex and bidders will not be successful in completing it.
This is simply not the case. In fact, for more complex submissions (some have had hundreds of elements needing to be completed) bidders have reported that they prefer the online process. An example of that is a submission participated in by 9 firms for a complex form with several hundred requirements. 100% of the bidders said they preferred the online process to submitting a paper submission even though it was the first time they had participated in one.
The technology leads the bidder through the process and there are dashboards and many error checking routines that assist the bidder to know exactly what has to be done. Many thousands of bids and tenders have been submitted with most bidders requiring no assistance whatsoever. Support is available for those who need it however there have been few instances of support being required, particularly once the bidder has been through the process once.
- The law of bidding is based upon paper submissions so there is little or no precedent for online processes.
This is true. Despite online bidding being in the market in Canada and the USA for a number of years it is very difficult to identify any new case law based on online processes. That is because many of the inherent problems with the paper based processes do not exist in an online environment. A well designed online bidding platform eliminates the many situations that create the conditions that cause bidding disputes that lead to court action.
With respect to the question of dual paper/online bid submissions, there is little to support the need for doing conducting such a process. The costs and risks of a dual process need to be considered before engaging in such a process.
- The work to create the two required bid forms and supporting documents doubles the administrative workload.
- The differences in the submission process significantly increases the risk of post tender complaints and problems as bidders may claim that one process provided an unfair advantage over the other.
- There will be two closing locations and two clocks governing the closing time. Synchronization of the clocks is difficult and can result in one process accepting bids later than the other again, raising the risk of a claim and its resulting law suit.
- The time to evaluate results is increased in order to collate the paper bids with the online bids into a single tabulation that can be easily assessed for compliance and results compared.
Should you make the transition to online bid submission?
Given a choice there are always those who will stick with what they know rather than experience a new option. It just seems easier. However, the time and cost efficiencies provided by an online bid submission process are significant and when objectively examined clearly support a move from the status quo.