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The hidden costs of free bid management software

October 22, 2020 | Emily Lambert

Procurement professional using free bid management software on her laptop and phone

Whether you’re trying to streamline manual RFP processes or accept vendor submissions while working from home, eBidding tools can help—but not every solution is created equal.

As public sector agencies across North America face tightening budgets and a renewed focus on cost savings to respond to the economic climate caused by COVID-19, free bid management software appears, at first glance, like an ideal solution. 

But as a procurement professional, you know that “free” or “cheap” don’t always mean “best value.” That’s because costs need to be cut somewhere. Sometimes the costs are borne by vendors or a company that wants to buy your data, or the eBidding supplier cuts services like client support or product updates.

Like anything else that’s free, you get what you pay for. But unlike a free Spotify account or a sample at Costco (remember those?), free bid management software can negatively impact your relationships with your vendors, or even put your organization at significant legal risk. Here are three reasons to forgo free, and instead invest in an eBidding solution that has you and your agency’s best interests at heart.

Don’t punish your vendors by making them pay

Many free bid management software solutions require vendors to pay to submit their bid and to view and download all RFP documents and details. But hiding opportunities behind a paywall hurts your vendors’ bottom line. In the end, it forces vendors to increase their prices and fees, so you’re paying one way or another.

Not to mention, these costs force vendors to be more selective, meaning your opportunities will get fewer views, fewer bids, and you will ultimately pay higher prices due to lack of competition.

Most of all, vendor-paid software models make it harder for Disadvantaged Business Enterprises (DBEs) and small businesses in your own backyard to bid, causing you to miss out on opportunities to significantly support your local economy.

Free bid management software isn’t worth the legal risk

Another way bid management solutions can offer their software for free is by selling your data to third parties. This isn’t like authorizing access to your personal data when signing up for a Facebook account; there are significant legal ramifications for giving up ownership of data in any business setting, especially as a public sector agency. That’s why your IT department likely doesn’t endorse free software.

Even if you own the data and what happens to it, free bid management software can still put your agency at risk by cutting corners when it comes to privacy and security. These tools may not get a lot of security updates, or they may cause instability to your systems or network. All it takes is one lawsuit or security breach to make that bid management solution suddenly not-so-free. 

Free bid management software doesn’t owe you anything (and that’s a problem)

Unfortunately, lots of free bid management software solutions cut costs by erasing any professional resources that help ensure success through implementation and beyond, like timely product support or a dedicated client success manager. In fact, you don’t get a whole lot of say into how the eBidding supplier operates, because you’re not the one generating revenue.

The result is often a frustrating experience for your internal stakeholders and vendors. Your bids portal is effectively your organization’s digital front lobby—do you want people jumping through hoops to do business with you? Do you want your implementation to fail because of a confusing user experience? Likely not.

So free bid management software likely isn’t going to meet your agency’s eBidding needs—what can you do? How do you move forward if you don’t have the budget to invest in best-value eBidding software? 

Public agencies have a unique opportunity right now to use their CARES Act or other COVID-19 funding to invest in procurement software. In fact, agencies across North America are using their COVID-19 funding to not only invest in eBidding software for this year, but for years to come. Time is running out though—the deadline to spend CARES Act funding is December 30. We recently teamed up with grants management leader eCivis to bring you the definitive guide on everything you need to know about finding CARES and other COVID-19 funding, applying the funding to your missions, and multiplying the funding to maximize outcomes. Download your copy of our latest eBook to get started.

About the author

Bonfire Blog Author Emily Lambert

Emily Lambert | Bonfire Interactive

As the Content Marketing Strategist at Bonfire, Emily writes thought leadership for procurement teams in the public sector. Best practices content for procurement professionals doesn’t have to be a chore to get through—which is why Emily strives to strike the balance of writing educational yet engaging content that inspires sourcing experts and equips them to make the best purchasing decisions.