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Competitive Bidding and Negotiation

In: Business and Management

Submitted By michelboyer
Words 946
Pages 4
De Havilland Inc.

Report on Competitive Bidding and Negotiation

Presented to
Louis Girard

Prepared by: Michel Boyer 10046739
February 8th, 2016
Table of Contents
Executive Summary 3
Issue Identification 4
Root Cause Analysis 5
Alternatives and Options 6
Recommendations 7
Implementation 9
Monitor and Control 10

Executive Summary
The current inventory of parts, flaps shrouds and equipment bay doors, to produce the Dash 8 airplane will run out in approximately 18 months. In keeping with the companies’ goals of reducing costs, we have asked our suppliers to accept a 25% reduction in prices. When it came to the actual, they were not willing to budge. For that reason, we issued an RFQ. We obtained 9 bids. The lowest bidder was Morton Enterprises.
After evaluating the bids, we identified two options, the first one to enter into negotiation with Morton so they can become the preferred supplier of flap shrouds and equipment bay doors. The negotiation must also include transportation, supply, support, etc. The second option is to also negotiate, at the same time as Morton, with the next 2 lowest bidders, Das Components and Lakeshore Industries.
Our recommendation is to start negotiation with Morton as soon as possible. Morton’s price will permit us to reduce our manufacturer costs and enter into a long term relationship.
A bid clarification meeting must be held quickly to make sure that Morton’s bid corresponds with our needs.
Each company will identify a product manager and meet monthly to monitor and control every part of the agreement.

Issue Identification
A supplier needs to be chosen for the manufacturing and supplying of flap shrouds and equipment bay doors for the Dash 8 airplane. The current inventory of parts available for production is good for another 18 months. An RFQ was…...

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