The Cheapest Bid
You are running a EUR 1.1m tender to replace 1,200 laptops and docks across three sites. Three bids are compliant with the specification. The lowest is 18% below the others. During due diligence an NGO report names a second-tier component supplier in that bidder's chain, alleging excessive working hours at one factory. The allegation is unverified, single-sourced, and dated eight months ago. Your organisation signed a supplier code of conduct last quarter. Procurement rules say the lowest compliant bid wins unless a documented exclusion ground applies, and none of the grounds listed covers an unverified media report. The award decision is in five days; the incumbent's leased estate must be decommissioned in month 4.
1. What is your path through the next five days?
Read the worked answer
Separate allegation from evidence, and act on the evidence available.
- Ask procurement and legal, in writing, whether any listed exclusion ground is engaged. If the answer is no - and on these facts it probably is - then disqualifying the bidder on this report would expose the tender to challenge and be unfair to the bidder. That is not a neutral choice either.
- Convert the flag into due diligence the process can carry: a supplier self-declaration against your code of conduct, disclosure of the second-tier factory, and - proportionate to the risk and the contract value - a contractual condition requiring an audit right and remediation plan within 90 days of award.
- Check whether the tender has a sustainability or quality criterion. If it does, this is scored evidence and the 18% gap may shrink on a whole-life basis. If it does not, say so in the decision record; that is a lesson for the next tender.
- State plainly to the decision-maker that the allegation is unverified and what it would cost to verify it.
2. Your CPO says the delay is commercially unacceptable and pushes for immediate award to the lowest bidder. How do you handle that?
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The CPO is the decision-maker; your job is to make sure the decision is made with the evidence visible.
- Put the options on one page: award lowest with the code-of-conduct conditions attached; award lowest unconditionally; award second-lowest at roughly EUR 200k more; or re-tender and lose the month-4 decommissioning window.
- Note the asymmetry honestly: the EUR 200k premium is certain, the reputational and remediation risk is not, and "lowest price is not lowest cost" is an argument, not a proof. Don't overstate it.
- Ask the CPO to confirm the chosen option in writing, not to sign a risk register entry - a written confirmation is normal governance, not an ambush.
- Make sure the month-4 constraint is visible as the reason for the timetable, because it is a genuine constraint and it is doing real work here.
If the CPO awards to the lowest bidder with the conditions attached, that is a defensible outcome and I will deliver it. What I will not do is quietly drop the due-diligence flag to save five days.
3. What do you record, and how do you keep this from becoming a personal file on colleagues?
Read the worked answer
Record decisions, not personalities.
In the procurement file:
- The allegation, its source, its age, and the explicit statement that it is unverified.
- The legal advice received on exclusion grounds.
- The due-diligence steps taken and the contractual conditions proposed.
- Who decided, on what date, on what basis.
In the project risk register:
- Supplier conduct risk, with an owner and a monitoring action (declaration received, audit scheduled, code-of-conduct review at 90 days).
Tone test: everything I write should be readable by the bidder and by the CPO without embarrassment. If it only makes sense as a defence of me, it is in the wrong document. The purpose of the record is that the next person can reconstruct why the decision was reasonable - not that I can prove I was right if it goes wrong.