Understanding How to Enable and Use Sealed Envelope Bidding

Objectives

After completing this lesson, you will be able to:

  • Understand How to Enable and Use Sealed Envelope Bidding

Sealed Envelope Bidding Key Characteristics

What is Sealed Envelope Bidding?

Sealed envelope bidding is used when laws require that buyers can see only certain sections of an event containing supplier responses in sequence and must qualify or disqualify participants before opening the next section (envelope) in the series. You can specify the maximum number of envelopes for the event, and Participants’ responses in envelopes are not visible to the project team until the envelope is opened during the Pending Selection period.

Sealed Envelope Bidding Attributes

  • Generally used to collect pricing separately from technical qualifications.
  • Avoids the practice of justifying a selection based on price or some other element after all bids were opened.
  • Applicable to RFI/RFPs only.
  • Project Owners do not need to use all of the envelopes on their event that were created from the template.
  • The number of envelopes is set at the template level.

When to use Sealed Envelope Bidding

Sealed envelopes were paper-based RFPs generally used in government and public tenders where information requested of suppliers is organized into distinct sections. The purpose of sealed envelope bidding is to allow the buyer to evaluate the responses of each section (e.g. technical qualifications) without references to responses of subsequent sections (e.g. price).

Understanding How to Enable and Use Sealed Envelope Bidding

Envelope Bidding Process

  1. Project Owner creates an RFI/RFP using a template designed for Sealed Envelope Bidding.
  2. Suppliers respond to the event and the system puts their responses into sealed (electronic) envelopes.
  3. Responses from all suppliers are hidden while the event is running.
  4. In Pending Selection, the project owner opens the first envelope and decides which suppliers will be Promoted to the next envelope.
  5. Suppliers who are not promoted; the system automatically deletes their responses in all opened and unopened envelopes.

Creating Envelopes

As content is assigned to specific envelopes, keep in mind that when the event is over, the envelopes must be opened in sequence. In other words, responses in envelope #1 from all suppliers will be reviewed to decide which suppliers, if any, are eliminated from the process before supplier responses in envelope #2 can be viewed. Therefore, content that should be used to evaluate/eliminate suppliers first should be stored in envelope #1. Content that should be used to evaluate/eliminate suppliers in the next round should be stored in envelope #2, and so on.

Opening Envelopes

Once the event is published, suppliers respond to the event. Note that the system doesn't display any indication to suppliers that the event is a sealed envelope event during bidding. To them, it looks just like a standard RFP or RFI. The system puts their responses into the appropriate envelopes, which are sealed and not visible to the project owner or team members while the event is open.

The option to open envelopes is not available on the Actions menu until the event moves to Pending Selection. However, suppliers that have submitted bids can be seen on the Suppliers tab under the Status column.

When the event moves to Pending Selection, open the first envelope and review the responses from all suppliers in this envelope by selecting Actions > Open Envelope. The system displays the suppliers who have participated, then Select the suppliers envelopes and choose Open Envelope.

The subsequent page displays the question "Should the system send notification emails to participants?" The system will display only the responses within that envelope for the selected suppliers. The icon for the section changes to an open envelope while other envelopes are still closed and sealed. Review the responses displayed and decide which suppliers may be promoted to the next stage and repeat this process until all envelopes have been viewed.

Considering other Envelope Rules

  • The ability to open envelopes can be assigned to project groups, which allows Project Owners to assign a specific subset of team members with the ability to open an envelope. Project teams can be created for each envelope and include or exclude team members as needed.
  • Keep the Rejected Envelope Bids can be enabled to retain the opened portions of rejected envelope bids in the system. Select No, and the rejected bids and all their previous versions are deleted.
  • Discard Bids for Event Updating Project Owners can choose to keep or discard envelope bids if an event is updated. Select Always Discard to discard the bids regardless of what type of edit you make to the event, or select Keep the Bids to retain envelope bids after an event is edited.
  • Send notifications to envelope openers SAP Ariba can notify project group members when an envelope is ready to be opened.

Demonstration

Play the video below to see how to set up Sealed Envelope Bidding.

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