When comes to price comparison on various vendors’ quotation. It’s good to collate all returned quotations into a single spreadsheet, put the respective items side by side.
Once the alignment is done, you are able to compare the final price no matter what discount rate the vendor provides. Do an apple to apple comparison.
Compare the quotation item by item with same exchange rate, category, discount structure, logistics charges, professional services etc.
In Asia, pricing is an unique item. There are many different countries in this region. Countries such as Thailand, Singapore, Hong Kong, Malaysia, Korea, Japan and so forth. Thus there are many taxation, currencies exchange rate issues that not many locations have. Thus in a quotation, a proper cost comparison is required.
Ultimately, how much the project needs to pay is crucial. Which vendor is offering the best deal and can offer furthest cost reduction is important. However, low price quotations may or will come in with low quality. Thus project manager got to balance the constraints.
There is certain amount of margins that the vendor has to make. However, the margin should be justifiable and should not be letting the vendor had the lion’s share.
Once the project kick-starts, project managers needs to track the project expenditure. Ensure there is no over spent on the project budget.
There will be many explanations if the spending is higher than the budget. Project Manager will have to answer to the Business Sponsor for the additional investment.
Discussion and effective negotiations are VERY important to get the deal win with low cost at the very initial stage.
Business Sponsor is easier to invest after you had made the necessary price comparison and valid justification.