Project Scheduling and Cost Control by James C. Taylor

Author:James C. Taylor
Language: eng
Format: epub
Publisher: J. Ross Publishing, Inc.

Vendor Bids

Vendor bids compare the bid price of one vendor against another. Notice that the word price is used here. The difference between cost and price is that additional money in terms of overhead and profit is added to cost to obtain price. This subject was discussed in Chapter 5 in detail. If evaluating vendor bids as a part of a larger contract, then the vendor’s total price is considered a part of the cost of winning the contract.

As an example, suppose an information technology project requires 50 computers and three vendors bid on the contract to supply them. If the requirements and specifications are accurate (i.e., computer capability, time and place of delivery, service, reliability, and so on), then the discriminator in evaluating the bids is cost. If the bid prices are $100,000, $98,000, and $95,000, then the winner would be the $95,000 bid, and this price becomes part of the larger bid.

It is clear, then, how important it is to understand cost categories and types of costs. It is not enough to just determine what the different costs in a project are; they have to be allocated to the correct pot of money because of accounting and financial restrictions and standards.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.