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Sealed Bids and Competitive Proposals

Ethics of the business world are created in such a way that whoever deems themselves worthy of a chance to compete is given a possibility to prove the worth of their salt. It is often the case with competitive proposals, while sealed bids set a barrier for those that are characterized as professionals and most qualified to compete behind closed doors.

Sealed biding often comes up as a way of saving time and money. It is true only when the rules are followed. Shortlists of companies that are deemed as fit and worthy to make their presentation are called to a panel of judges to present their works. From there, the one with criteria that is closest to the budgeted and expected range is given the contract.

According to Cohen Seglias' Federal Construction Practice Group (n.d.)

Although sealed bidding is the most common acquisition method used by the federal government to procure construction services, the use of competitive proposals is growing. Unlike sealed bidding, where price is determined at the time of bid opening, competitive negotiated procurements may provide an opportunity for a bidder to shift his position regarding price prior to award.

The aforementioned statement draws a conclusion that sealed biding is not exactly fair to the public. In terms of presenting contracting ideas to either the government or private sector, a representative or negotiator may illegally help a biding company's representative.

Competitive proposals are thus preferred as the price can be discussed even during presentations. It is not set out right from the issuing date, and thus it does not limit competition to price. Competitive proposals motivate participants to work even harder as they are certain of negotiating a good deal based on their efforts. The fact that in competitive proposals, after looking at quotations from different suppliers, the most competitive one is chosen makes a competitive proposal a better and much fairer biding method in comparison to sealed biding.

When it comes to sealed bids, a process of selecting the contractor does not drag that much, but when it comes to construction, it is time-consuming. The long lead time required for completion of a given project often makes sealed bidding lose out when it comes to private sectors. The cost for a step-by-step procedure is inefficient in use of time.

In sealed biding, the success of a project can be measured in terms of profit earned from the job. Naturally, there is a conflict between profit and costs throughout the project; the contractor's motivation is to minimize costs and, consequently, his or her contribution to the project. That is why competitive proposals are much fairer than sealed biding because the total proposed amount includes the cost of materials as well as foreseen profit.

The U.S. Department of Justice (2011) states that "evaluation criteria shall not be changed after receipt of offers" (p. 19). Therefore, it means that the calculation of direct and indirect costs should be done thoroughly before a contractor agrees to sign a bid and start working on it.

As more and more contracts are being issued, time and money have to be taken into account. That is why most of the private sectors are abandoning sealed bid contracts giving way to competitive proposals. At the end of the day, a contract awarded in a sealed bid will attract a lot of money and consume more time in comparison to the one chosen on a competitive proposal basis.