Reduction is a type of bargaining in the course of which the price is reduced. Usually, when tenders are held, there is an urgent need to conduct a reduction. It turns out that additional tenders are held between bidders. A step to reduce prices can reach only 5%. The reduction procedure itself is identical to the auction, because in both cases they are considered tenders, between which there are slight differences. To study the latter, you need to familiarize yourself with the main signs of bargaining.
Main characteristics
Before bidding, consideration of applications submitted by participants takes place. If violations are found, then such applications are rejected. When the winner is determined, the interested person will have the opportunity to conclude an agreement with him. From a legal point of view, a reduction is a sale that is not related to procurement. The Civil Code of the Russian Federation does not apply to it.
Distinctive features
The difference from the auction auction is that the auction refers to bidding, as a result of which the price rises. That is, the participant who offered the highest price becomes the winner. In fact, these concepts are identical, since earlier bidding with a decrease in value in government procurement was called, on the contrary, an auction. Therefore, now these two concepts mean the same thing.
The main distinguishing feature of these concepts is that the reduction is governed by the rules specified in the procurement regulation. And when the bidding is over, the customer may not conclude a contract with the winner. He has no such obligation.
Types of Reduction
There are several types of trading characterized by lower prices:
- Open. When the customer informs an unlimited number of participants that procurement activities will be carried out. This type of bargaining mainly occurs in electronic form.
- Closed. Only those companies that received a special offer take part in it. Trading is carried out with the personal presence of the event participants. In a pre-agreed place all participants, suppliers gather. Each has a personal number that will be needed when selling their own offers. The customer must have a person who supervises the process. The procurement phase is considered completed when the supplier who announced the lower price is determined. Reduction in purchases is carried out only if applications for participation are submitted.
By analyzing the species, it becomes clear what a reduction in procurement is.
Bidding Procedure
Electronic reduction is an event that takes place in several stages:
- A notice is first developed for the participants.
- It is placed five days before the receipt of applications is completed.
- Suppliers submit applications.
- Applications are considered up to two days. If only one application arrives, bidding is not carried out, and the participant who has submitted the application is recognized as the winner.
The result of the bidding is indicated in the minutes.
If desired, a contract is concluded with the winner.
Benefits
Reduction is a very profitable event, if only because there are guarantees that everything will go smoothly. Unlike bidding in other forms and venues. Such bidding can be compared with the competition between the participants. Basically, customers offer favorable conditions regarding delivery, give a guarantee for a long period of time.
Often, such conditions make bidding more effective. For organizers of the reduction, such features are very beneficial.Only to participate in it you need to have certain skills so as not to make mistakes.
The final price depends on the number of applications of participants. In the process of reduction, customers study various data in order to lower the cost of goods. Such conditions affect the seller’s income. Participants, in turn, try to cover costs. When there is a change in the terms of the transaction, the bid price changes. But in such cases, the organizers receive reduced profit.
When is a reduction needed?
This type of bidding is necessary in certain cases. These include:
- Purchasing a large batch.
- Situations when the winner is determined depending on the value of the goods.
Bid security
When applying for a reduction, it is necessary to observe some conditions:
- The participant must make a deposit in the form of a sum of money to the account of the platform where the auction will be held.
- Funds are paid in accordance with the main provisions governing the reduction.
- After this event takes place, funds are returned to participants. This happens within a week after the end of the auction. But money is not returned to the winner.
The security deposit is frozen for some time by the operator of the electronic platform. The amount to be paid is set in accordance with regional documentation. Therefore, the price may vary depending on where the auction is held. Having studied the main points, we can say that between the auction and the reduction the difference is very significant.
If the winner of the reduction does not provide the contract that he has signed within the prescribed period, then the transaction shall be recognized as failed. And the participant is recognized as having evaded the conclusion of the contract. Also, such inaction entails a halt to member accreditation. Therefore, it is very important to comply with all established rules when bidding, as in this case you will have to submit an application again.
Thus, a reduction is a bargain that is less common than an auction. Since it is not used in public procurement, but is necessary in the interaction of private firms, companies. A reduction is a bargain only formally, since it is not legally documented by law. However, the demand for such additional bidding is quite large. Indeed, situations often arise when there are many participants. Therefore, it is necessary to determine the winner from a large number of worthy competitors.