Examining Vendor Bid Analysis for Projects
Vendor Bid Analysis is a cost estimation technique that is based on the bids obtained from vendors. The proposed costing from the vendors is considered while developing estimates for the project.
Generally, a part of the project is outsourced to a vendor , so the cost costing for that outsourced part of the project can be sought from the vendors through their proposals , bids or quotation.
Consider a company that had taken the design and launch of the new solar car model program. This can be further divided into several small projects for creating major components such as engine , chassis , driving system, solar panels , eterior and interior.
These projects have a bigger objective and are interrelated to each other. The company decides to outsource the project that deals with the making of solar panel and allotted $100,000 for the project . The project manager sends an invitation to vendors to obtain the best bid for the project.
The costing suggested by the vendor helped the Project Manager to refine the cost estimates . Later the company decided to select a bid that includes all the project deliverable and support the final total project cost.
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