Every day hundreds of organizations conduct competitive bids to pick the best supplier to meet their needs. Unfortunately, too many organizations are using the wrong tools for the wrong job – often resulting in selecting the wrong supplier or developing a contract misaligned with the organization’s objectives. Simply put, using the wrong competitive bidding method is like putting a square peg in a round hole. Forcing it to fit is myopic and inefficient.

To further complicate things, newer more collaborative approaches have emerged which tout the benefit of allowing buyers to gain insight and improved supplier innovation. The question arises: what is the right tool for my situation? We believe today’s sourcing professionals should understand and enthusiastically embrace the entire suite of tools in their sourcing toolkit and carefully select the method that is most appropriate for their situation.

Purpose of this Paper:

This paper is a collaboration between several experts in both private and public procurement. It is not an academic paper—rather it is a practitioner’s guide to help procurement professionals better understand each of the various competitive bidding methods and when the use of each is most appropriate. We have one goal: to help bring awareness to procurement professionals throughout the world of the various tools and when to use them. In short, we are “unpacking” competitive bidding methods—referred to in shorthand terms as RFx processes.

Structure of this Paper:

This white paper explores the various solicitation methods. We review seven different methods – ranging from those to be used in a highly competitive commodity “market” such as electronic auctions, to highly collaborative requests for solution and requests for partner methods. This paper has four sections:

• Part 1 provides insights into the changing landscape of strategic sourcing. In this section, we explore some of the most prevalent trends impacting strategic sourcing and show why procurement professionals need to insist on challenging their thinking and embracing more collaborative competitive bidding methods.

• Part 2 is an introduction to the various RFX methods where we provide a high-level overview of each of the RFX methods most commonly used in practice today.

• Part 3 “unpacks” the various RFX methods in more detail, reviewing what, why, when and how each method is used.

• Part 4 offers a conclusion and a challenge for procurement professionals to embrace more collaborative methods when appropriate.

  We hope you’ll find this white paper a valuable resource to help shift your thinking to an environment that demands strategic sourcing in a new economy.