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Open bids are visible to all bidders and can be made in live auctions or for construction projects. The highest bidder usually wins, but there may be a waiting period before adjustments can be made. The process is determined by law and has advantages and disadvantages.
An open bid, or unsealed bid, is an offer that is available for all other bidders to see and possibly act on. These bids can be made through a traditional live auction, where an auctioneer indicates prices when bidders indicate their willingness to pay. Open bids may also be awarded for construction projects, where the highest bidder often wins the contract. Some projects and sales may require an open offer and some may not.
In a traditional merchandise auction, all bids are open because all bidders can hear or see the bid being made. All bids can also be changed, as long as another bidder’s bids are higher. Finally, the auctioneer declares a winner when no more bids are offered after a certain period of time. The highest open bid is generally declared the winner, unless there are extenuating circumstances, such as non-payment. This is a common process for real estate and other property sales.
If the open bid is being sought in connection with a project or to award some type of contract, the process begins with a request for bid from the sponsoring agency, which is typically a government or private company. Once the application has been published, the specifications will also be available for review by different bidders. Bidders who find work that matches their skills are free to bid. The bidder should look at the bid board, which can be a physical board or an online presentation, to see if your bid is competitive with others.
In some cases, a waiting period applies before adjustments can be made to an open offer. This is to ensure that all bidders have an opportunity to submit their original bid. Then, once the waiting period has expired, adjustments can be made. Bidders must weigh their costs against those of other bidders in an attempt to find their best possible offer, but also ensure that the project does not cost them more than they pay. The procedure for determining whether a project or auction is through an open or closed bid is often determined by law.
The open bidding process has advantages and disadvantages. The benefits of an open bid are that unethical behavior among bidders is easier to discover, and the competition could provide a greater advantage for the seller. On the other hand, there is not likely to be much difference between a winning bid and a losing bid in an open bidding process, which may be to the disadvantage of the entity seeking proposals.
Smart Asset.
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