| global percentage bidding |
Competitive bidding procedure used for the procurement of external services.
In "global percentage" bidding, Purchasing specifies its own prices for individual services in addition to providing descriptions of them. Service descriptions and prices are sent to prospective bidders in the form of individual requests for quotations (RFQs).
Purchasing then expects bidders to indicate whether they would be prepared to do the work involved for more or less than the rates estimated by Purchasing by submitting quotations showing a percentage addition to or deduction from the specified prices. This percentage addition or deduction is quoted either for each group of services (outline level) or for the entire set of service specifications.
The goal of the "global percentage" system is to simplify the maintenance of service specifications.
Since the service descriptions in the quotations of the various bidders do not usually vary, and only the percentage (addition or deduction) need be entered in the quotation, Purchasing is faced with less maintenance effort in comparison with normal RFQ/quotation processing.