Developing Competitive Bids: A Framework For Information Processing

This paper considers information requirements for the development of a bid price in a generalized competitive-bidding situation. A framework for the bid-preparation process is described. The framework outlines the steps required to combine various types of information to produce a bid price. Particular emphasis is placed on information about competitors, criteria to be used by a contract buyer, and the buyer's method of evaluating bids. The framework incorporates the ‘maximization of expected profit’ approach much discussed in the literature, but the mathematical details of this calculation are not considered. Discussion focusses on obtaining and making use of relevant information, and on desirable modifications to expected-profit calculations.