Newsgroups: comp.risks
X-issue: 9.22
Date: Tue, 5 Sep 89 23:11:36 -0400
From: henry@utzoo.UUCP
Subject: Re: Lowest-bidder or weak specs? (RISKS-9.18)

>2. Discard the highest and lowest bids. (Since all bidders are bidding
>on the same job, if the bids are wildly out of range there's either a
>problem with the spec or the vendor.)

Unfortunately, discarding the low bid *sometimes* disqualifies precisely
the people who are best suited to do the job:  the ones who have found a
new approach that radically simplifies the problem.  The Douglas proposal
for what became the A-4 Skyhawk (1950s carrier-based light bomber) specified
half the weight -- and half the price -- that everybody else thought
reasonable.  In the beginning, everyone thought Ed Heinemann (the chief 
designer at Douglas) was either crazy or trying to pull a scam.  The
Skyhawk arrived on schedule, on spec, on budget, on price, and on weight,
and was built by the thousands in an enormously successful program.

If the bids are wildly out of range, it may be because somebody's got more than
usual insight into what's going on.  This might be either a realistic
assessment of the real cost of the project, leading to a high bid, or a new
approach, leading to a low bid.  Either way, accepting the out-of-line bid
could be the right thing to do.  Unfortunately, it's really hard to tell for
sure.  You can't just look for some radical difference in the proposals,
because there may not be one.  Heinemann didn't coat the Skyhawk with
antigravity paint; he was just unusually firm and thorough about finding ways
to reduce weight.
                                 Henry Spencer at U of Toronto Zoology
                                 uunet!attcan!utzoo!henry henry@zoo.toronto.edu