Purchasing · Daily operations · 11 min read

Run a call for tenders and a reverse auction

Invite several suppliers to quote, compare the offers, run a live reverse auction if you want one, and award to a purchase order.

Before you begin

• The Calls for tenders switch (and Reverse auctions, for auctions) must be on.
• purchase.tender.manage runs every step except awarding. purchase.tender.award is also needed to award. Whoever raised a tender or auction cannot award it.
• Products must be purchasable, and suppliers active.

Run a call for tenders

1. Open Purchase > Orders > Calls for tenders and press New.
2. Enter Title, Closes at (default seven days ahead) and Bids: Sealed until closing (no price shows to anyone) or Open as they arrive.
3. In What is asked for, pick a Product and enter the Quantity (up to 200 lines).
4. Tick the suppliers to invite. You can add more later with Invite a supplier, while the tender is open.
5. Press Save, then Issue. The status is Open for quotes, and each supplier gets a quote record.
6. Record quotes for suppliers who reply outside the portal: under Suppliers and their quotes press Enter quote. Enter Priced per (for example Carton), Base units in it (12), Price, Tax %, or tick No bid for a line. Press Save and submit. Suppliers with a portal login do this themselves.
7. After the closing time, or when you press Close for quotes, the Comparison card appears. Offers are compared per base unit.
8. Enter the Award quantity against each chosen offer. If it is not the cheapest valid offer, type the Award reason.
9. A different person with the award right presses Award.

Worked example. 24 units asked. A quotes a carton of 12 at 1,200.00, which is 100.00 per unit and 2,400.00 for 24. B quotes 110.00 per unit, 2,640.00. A is cheapest. Awarded 24 to A with 5% VAT gives a draft purchase order of 2,400.00 plus 120.00 = 2,520.00.

Run a reverse auction

1. Open Purchase > Orders > Reverse auctions and press New.
2. Choose an issued tender (not yet awarded) that has lines and invited suppliers. One auction per tender.
3. Set Starts and Ends (end after start, at most 14 days apart), an Opening price (lot total) as a ceiling, Minimum drop per bid (%) (default 0.5), and the anti-sniping fields Extend if a bid comes in the last (minutes) and Extend by (minutes). Choose what Bidders see: their rank only, or rank and best price.
4. Press Save as draft, open it, and press Publish.
5. Watch the ranking. It refreshes every five seconds. Close now ends it early and needs a reason.
6. After the end, a different person with the award right opens it and presses Award. The default winner is the lowest bidder. Choosing a higher bid needs a reason.

Bidding rules for suppliers: every line is priced, the lot total does not pass the opening price, and each new bid is at least the minimum drop below the supplier's last bid. A bid in the last minutes extends the end.

What happens next

• Award creates one draft purchase order per winning supplier at the quote prices and tax, with the quote reference as the supplier reference. Open it from the Purchase orders smart button and press Approve order.
• The tender becomes Awarded; winning quotes are Awarded and others Lost. Requisition lines behind the tender show as ordered.

Good to know

• Sealed prices are absent, not hidden: until closing the comparison is refused, 'This call for tenders is sealed until it closes: no price is shown before <time> UTC.'
• Issue refusals: 'Add what is asked for before issuing.', 'Invite at least one supplier before issuing.', 'The closing time has already passed.'
• An expired quote cannot be awarded: '<Supplier>'s quote expired on <date>.' Over-awarding: 'The supplier offered only 60.'
• 'Somebody other than whoever raised this call for tenders must award it.' and, for auctions, 'Somebody other than whoever raised this auction must award it.'
• 'Give the reason for not awarding the lowest bid.' If nobody bid: 'Nobody bid; cancel the auction instead.'
• Cancel a tender or auction with a reason. An awarded one cannot be cancelled.
• With Commit only to approved suppliers on, an unqualified supplier cannot be awarded.
• If you untick an invited supplier on a draft tender and save, the supplier still counts. Cancel and re-create the tender to drop a supplier.
• The order price from a carton quote is rounded to two decimals per unit, so the order can differ from the comparison by a few fils.