sealed bid

1. A purchase offer that is delivered to the seller or the seller's agent in a sealed envelope so that it remains secret from other bidders.
2. An offer to sell or to perform work that is delivered in a sealed envelope to a potential customer. Government agencies are often required to solicit sealed bids for major procurements.

What is the best way to go about determining the price to submit in a sealed bid? I have passed on several opportunities to bid on business because I wasn't quite sure how to determine the amount to bid.

Sealed bids are tricky. Three points are critical to understand before bidding: First, will they absolutely agree to buy at some defined cost or less? Second, what is that cost? And finally, what do you expect your competitors to bid at? The last question is the hardest; but if you have been in the business for a while, you will have a pretty good idea of that number. Knowing your own costs is straightforward. If you have lots of opportunities compared to resources to execute, you can try to get the highest reasonable price possible. If you have fewer opportunities, you have to cut your bid more to “get the business." Better to bid a bit high and safely than not to bid at all.

Deaver Brown, Publisher, Simplysoftwarecd.com, Lincoln, MA