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disadvantages of selective tendering
Tender experts say selective tendering leaves room for corruption as it allows officials for the body inviting the tenders to negotiate prices with each company they approach. Experts say this kind of tendering tempts officials in that it opens [ doors to negotiate inflated prices so that they can share the spoils with the company that agrees to play ball. Unlike in an open tender where
everybody who qualifies is entitled to submit their bids and can expect to be judged according to the specifications of the tender, in selective tendering there is a risk of contracting a less qualified service provider or one who is not qualified at all. It is quite easy for an official representing a tendering body to select a less qualified company because it has agreed to pay a bribe Thabang Mokatse, a chartered accountant who has experience in forensic investigations, told the Lesotho Times that most companies and governments discourage selective tendering. Mokatse said a body that opts for selective tendering is running the risk of choosing a bidder who will disappoint because the selection is only based on whether the bidder is known to have been doing similar jobs, not on whether he is able to meet all technical requirements stated in the tender specifications. That body, Mokatse said, would have denied itself a chance to choose the best bidder who meets all technical requirements or who has a plan B if certain technicalities arise. “I personally don’t encourage selective tendering although it may have some advantages,” Mokatse said. “I don’t think a tender process in which a body that is inviting tenders has a chance to negotiate a price with companies that are invited to tender is good,” he said. “Compared to other kinds of tender processes, this one is risky.” Mokatse said the advantages of selective tendering are that one selects companies whose track record is known to him and therefore has a certain degree of conviction that a chosen firm will do what is expected of it. The second advantage, he said, is that one is able to negotiate prices with each company they approach and, as a result, might actually save money. He said other tendering processes like closed tender and open tender have their own ]
Expert answered|selymi|Points 5440|
Asked 8/8/2011 3:17:16 AM
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Questions asked by the same visitor
advantages of open tendering
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Updated 8/8/2011 3:47:56 AM
1 Answer/Comment
It avoids work being restricted to the same old names - gives other suitably qualified operators an opportunity which may be beneficial, especially if they are more efficient or have lower overheads. If selection is solely on cost it is likely to give rise to problems during the course of construction - especially if the contractor doesn't really know hat he is doing. You can include a quality component as part of the assessment but it is often difficult to discount a low offer which may be unrealistic. It is almost inevitable that intending parties will know who else is bidding - espcially if they all approach the same subcontractor/specialists. You need to guard against collusion or proce rigging (it happens). A lot also depends on the quality of the information - if it is good the contract is more likely to be enforceable but may result in the contractor going bust - bear in mind that most consultants have had to cut their fees to compete for the work so may not be able to resource the projects as they would wish. One disadvantage is that you have not really had the benefit of a contractor's input during this stage - so may have missed a few tricks as to how to make the design as economic as possible - which occurs in other forms of procrment - eg maximum guaranteed price arrangements. The most successful commercial contracts are often negotiated - open tendering wastes a lot of money - but that is not generally possible in public contracts.
Added 8/8/2011 3:47:56 AM
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