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PRIVATE PROCUREMENT

The sharpest quote is a liability.

A factory needs a year of packaging supplied. Four vendors are invited. Quotes arrive by email over two weeks to a procurement officer who can read every one of them as it lands.

Whether or not that officer does anything with what they read, every vendor knows they could.

One round, four bids, two states

BEFORE THE DEADLINE

  • Vendor Asealed
  • Vendor Bsealed
  • Vendor Csealed
  • Vendor Dsealed

Sealed. Readable by nobody, us included.

AFTER IT PASSES

  • Vendor ARp 840 juta
  • Vendor BRp 905 juta
  • Vendor CRp 893 juta
  • Vendor DRp 868 juta

Open to every bidder at the same moment.

So vendors pad, or they wait until the final hour and quote badly. The buyer pays for a process that was meant to save them money.

The same round, four vendors, one buyer who can read

  1. Day 1

    Vendor A quotes Rp 840 juta

    The honest number. It is also the number the buyer now knows the market can reach.

  2. Day 4

    Vendor B quotes Rp 905 juta

    Padded. B assumes an early quote is worth less than a late one, and B is right.

  3. Day 9

    Vendor C asks for an extension

    Not stalling. C wants to submit as close to the deadline as the rules allow.

  4. Day 14

    Vendor D quotes Rp 868 juta at 16:58

    Two minutes before close, priced on nothing, because guessing beats being read.

Vendor A quoted honestly and is now the reference price for everyone else. That is the lesson vendors learn once and never unlearn.