Adding New Terms and Cost Components in Price Breakdown Events

An event using Price Breakdown collects a value for the cost components of a good or service to itemize total cost values.

• Suppliers bid on cost components of an item, rather than the item itself​
• Terms must be included in formula (include in cost field)
• System uses formulas to add all cost components to show the price for that item
• Cost Terms usually visible to the supplier in Total Cost

Price Breakdown helps to see how a supplier arrived at their prices, and prices can be compared more critically to help decide if the price is reasonable.

For example, computers. Rather than having a line item to collect a price for the computer, you may want to collect prices on the components of a computer. You may want to know how much one supplier charges for monitors versus a different supplier. This could explain the difference between supplier prices you wouldn’t be able to collect without a Price Breakdown type of event. Supplier A may have a price of $1,000.00 while Supplier B has a price of $1,500.00. By using a Price Breakdown event, you would be able to see where that additional $500 is coming from for Supplier B.

Add one or more line items as you normally would. Remember that suppliers will not be able to submit a price for any line item directly.

Next, add the cost term(s) that make up each line item. Note that when you create an RFP with cost breakdown, you cannot input a price for initial price, historic price, or reserve price of the line item. Instead, these values can be entered for the cost terms that make up the item.

Complete all required fields including answer type and visibility and response required settings. Select the "i" tooltips next to each setting for more information.

In our example, we are asking suppliers to submit values for the terms that make up a computer. Each computer accessory has been added as a new cost term.

When suppliers bid in a Price Breakdown RFP, they can submit values only for the terms involved. There is no field to allow them to submit a price for the item itself. In our example, suppliers cannot submit a price for the computer. Instead, they must submit values for the terms that make up the price of the computer, as shown below.

Play the video below to see how to set up Price Breakdown events.