When you open a tender, you make two decisions in the first step of the wizard: how bids are collected (sealed bid or open auction) and whether there is pre-qualification before bidding. Combining the two gives four setups: Sealed Bid, Pre-qualification + Sealed Bid, Open Auction, Pre-qualification + Open Auction.
Sealed Bid
Each supplier submits its bid privately. Bids are not visible to anyone until the bid deadline, including you. When time is up, they all open at once.
- The supplier can update or withdraw its bid until the bid deadline.
- After the envelopes are opened, you can start a new round and ask the suppliers you choose for a better price. The number of rounds is not set up front; you decide after seeing the bids.
- Besides price, you can score bids on criteria such as technical competence.
- If you allow it, a supplier can bid in another currency. In a tender with several items, a supplier can bid on only some items (this option does not exist in a tender opened from a request).
When: Purchases with a clear specification, where the bid is evaluated on more than price (delivery, payment terms, quality). This is the right start for most tenders. Details: How sealed bids work.
Open Auction
During the auction, suppliers see a live ranking and bring their prices down. Competitors' names are never shown; the ranking says something like "Supplier 2". Depending on your setting, amounts can also be hidden and only the rank shown.
- A bid can only be improved: each new bid must be lower than the supplier's current bid. Bids cannot be withdrawn.
- You can set a minimum decrement and require every bid to go below the current lowest price.
- If last-minute extension is on, a bid arriving in the final minutes extends the time and gives competitors a chance to respond.
- If you enter a ceiling price, suppliers see it.
- There are no evaluation criteria, extra currencies or negotiation rounds: the decision is made on price.
When: Standard purchases that are easy to describe and differ little apart from price (raw materials, consumables, transport), when there are enough competing suppliers.
Adding pre-qualification
Pre-qualification is a gate placed in front of either type. Before bidding, suppliers answer your questions: text, yes/no, file or score. You review the answers and approve them, or reject them with a reason. Only those you approve can bid.
In a tender with pre-qualification, you choose the bid deadline not when publishing but when starting the tender after pre-qualification ends.
When: Purchases that require certificates, capacity or financial standing; situations where you do not want to deal with unqualified bids.
Side by side
| Sealed Bid | Open Auction | |
|---|---|---|
| Who sees the bids | No one until time is up, including you | Everyone sees the live ranking, names hidden |
| How many bids a supplier submits | One bid per round, can be updated until time is up | As many as it wants, each lower than the last |
| Withdrawing a bid | Allowed until the bid deadline | Not possible |
| Negotiation round | As many as you want after the envelopes open | None |
| Scoring criteria | Yes, optional | No, decided on price |
| Partial bids by item | Yes (in a multi-item tender not opened from a request) | No |
| Bids in another currency | If you allow it | No |
| Ceiling price | Visible or hidden | Always visible |
Start with a sealed bid. After the envelopes open, you can still apply negotiation pressure by starting a new round, without showing suppliers their competitors' prices: if you wish, they only see their rank.
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