Preparing Alternative Pricing

Alternative bidding gives suppliers (participants) the ability to submit alternate bids after they have submitted a primary bid based on a guided sourcing event as you have defined it. Alternative bids allow suppliers to bid alternate quantities and term values to show the project owner how to save more money. Suppliers can also be allowed to add their own items.

Supplier offerings don't always align with what a Project Owner creates into the line item, and Alternative Pricing allows buyers to view a primary bid based on the initial line item setup, and follow up with an altered-term, secondary bid to decide what meets your needs the best. Alternative Pricing functionality allows suppliers to submit different values for the terms included in an item and adjust their price accordingly.

The following must be met to use alternative bidding:

1. Guided Sourcing is enabled, and the user belongs to the Category Buyer system group
2. Is the event owner or has project owner capabilities for the event
3. A Template Author has created a template with alternative bidding rules configured for event creators

• Suppliers must first respond to the original bid before they can submit an alternate bid.
• Alternative pricing is the only alternative bid type in guided sourcing, as tiers and bundles are not included.
• Alternative pricing is available for line items only.

• The Can participants create alternative responses? rule only appears if the Specify how lot bidding will begin and end timing rule is set to Parallel.

• When bidding is complete, the project owner can award business in that event or create follow-on events, such as an auction, using the quantities, and terms that will likely yield the best savings.

The alternative bidding rules in guided sourcing include:

1. Alternative Bidding Event Rules
   1. Can participants create alternative responses?
   2. Is term editable in alternatives?
2. Alternative Bidding Template Rules
   1. Can participants create alternative responses?
   2. Include alternative pricing bids when bids are ranked
   3. Should questions be visible in alternatives?
   4. Should there be a limit on number of alternatives?
   5. Alternative Limit value

Project Owners must create their event using a template that has Alternative Response bidding rules enabled. Within the Items that need quotes section, add a line item to the event, and create a new term that is editable in alternatives by taking the following steps:

1. Select the Add Term within a line item
2. Choose Editable by Owner and Participant in the Is term editable in alternatives? field
3. Choose Yes to the Can participants create alternative responses.

We create a line item for pens of a certain color and quantity. The line item can be created with terms for the color, and specified quantities with units of measure.

When alternative responses are enabled, suppliers must first submit their primary response. After their primary response is accepted, the system will give them the button, Revise/Alternative Response, to create an alternative response.

Their options for creating alternative responses will be based on how rules are enabled for the event, so what they see in the drop-down may differ if different alternative response types have been enabled.

Once the supplier has chosen to revise their response and create an alternative, they must select the line items (not lots) they’d like to use in their alternative response.

In the above, the supplier has chosen both available line items to create an alternative response. In this example, the supplier gave their alternative response a name of ‘Color Change’ to indicate what makes this response different from their primary responses.

The alternative response above provides options if you were to get black pens instead of blue pens. Since these are office supplies, alternatives for a lesser cost may be desirable and alternative bidding allows you to consider this option while collecting pricing for the desired materials.