Why Obtain Bids?
There are many variables to be determined in buying that are best answered by obtaining bids. These variables, in the form of questions, are as follows:
Is the product the best one available for the particular application?
Is the product description current, or has it been superseded by a more current model?
What is the availability of the product?
What is the F.O.B. point? This determines who pays the freight; but what is more important, title to the goods passes at the F.O.B. point. We always try to establish the F.O.B. point as the University, which means the vendor pays the freight, and if any freight is lost, stolen, or damaged in transit, it is the vendor's problem, because they have title to the product.
Are the vendor's name and addresses still current?
What are the payment terms?
Will the vendor accept a purchase order from us, thereby establishing a contract?
Identification of best price and delivery
When a vendor returns a bid, they are making an offer. If we issue a purchase order, we have accepted their offer and covered it by consideration. It may seem like a minor point, but going out to bid first simply places the horse before the cart and enables us to make the final decision whether we wish to place the order on the vendor's terms.