How does sealed bid method differ from negotiated procurement method?
Sealed bidding has been widely used in government contracting but it has been reported to be more prone to bid rigging (Haberbush, 2000). To counter the prospect of a bid rigging, a negotiated procurement process may prove fruitful. Negotiated bid may be more transparent and provide the competitors to openly compete for the contracts and hence limit the possibility of a biasness in any form.
During a sealed bid, the price of the project is determined when the bids are opened. But in the case of a negotiated procurement, the contractors who are competing for the contracts may change their prices depending on the nature and unfolding of the needs of the government. During a sealed bid, the contract has to be provided to the party that has the lowest bid but in the case of a negotiated procurement, the government negotiates with different contractors and the award of the project may not be based on the initial offer.
A negotiated procurement process is more thorough and lengthy than a sealed bid process. In the negotiated procurement process, the government may provide many opportunities to different contractors and let them explain their proposal from different angles before any final conclusion is made and the contract is awarded. The evaluation would not be based on the price offered only, but also the human resources, their experiences, the technical capacity and many more factors may also be considered.