Working with vendors

Understanding the quotes you get back from vendors in a thread from Reddit on why you wouldn’t tell vendors your budget for a project:

The goal is to accurately and narrowly define scope and requirements. Without disclosing budget to the vendors, as the “quality” (accuracy + detail) of your request increases, there should be less of an overall variance between vendors. For a very well written request, vendor quotes should come back in a tight cluster. Assuming your request is accurate, if this cluster of pricing is well below your budget, it suggests that you over-budgeted for the project. On the other hand, if the cluster is above budget, you under-budgeted and will probably have to sacrifice some of your requirements to get the price down. Outliers might suggest vendors who are trying to underbid their competition, or trying to overcharge you. Large variance (no cluster) or a large number of vendors going over budget suggests a broadly defined scope or vague requirements. Giving vendors a budget allows them to easily tweak the quotes to fit within your expectations while not knowing anything more about your scope or requirements. Proceeding with a quote scope that lacks the proper parameters and/or missing requirements is a recipe for disaster…

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