Sealed envelope bidding in Ariba is a feature in SAP Ariba Sourcing that allows buyers to manage supplier responses in a sequence that is often required by regulatory laws. This tutorial will guide you through configuring and using sealed-envelope bidding in your sourcing events.

What is Sealed-Envelope Bidding in Ariba?

Sealed-envelope bidding is used when laws require that buyers can only see certain sections of an event containing supplier responses in a specific order. Buyers must qualify or disqualify participants before moving to the next section (envelope) in the sequence. This ensures a structured and impartial evaluation of supplier bids.

In SAP Ariba Sourcing, envelopes are used to group sections of an event. Each envelope contains responses for all event participants for a specific section, and participants’ responses remain hidden until the envelope is opened during the Pending Selection period.

Key Features of Sealed-Envelope Bidding

  • Maximum Envelopes: You can specify the maximum number of envelopes used in an event.
  • Section Assignment: Sections can be added to envelopes, and each envelope may contain multiple sections.
  • Sequential Opening: Buyers must open envelopes in sequence, meaning they can only see responses from one envelope at a time.
  • Selective Viewing: Buyers can view the responses only from participants who qualify to continue. Participants who are disqualified will have their responses deleted, unless configured otherwise.
  • Default Setting: The default setting for sealed-envelope bidding is No Envelope, meaning no envelopes are used unless explicitly configured.

How Envelopes Work

To understand sealed-envelope bidding better, consider the following example:
If the first envelope contains questions about technical specifications, participants need to be qualified or disqualified before buyers can view the responses in the second envelope, which may contain pricing details. This way, buyers evaluate suppliers in a structured and compliant manner, avoiding any bias from seeing pricing before evaluating technical qualifications.

Envelopes operate as follows:

  • Section Assignment: When you create a section in the event, you must specify if it belongs to an envelope and which envelope it belongs to.
  • Multiple Sections: An envelope can contain multiple sections.
  • Visibility Rules: Buyers can only view responses in envelopes that have been opened, and they must open envelopes in the specified sequence.
  • Selective Responses: When an envelope is opened, buyers can see responses from participants who have been qualified to continue. All responses from disqualified participants are deleted unless the relevant event rules have been set to retain them.

Steps to Configure Sealed-Envelope Bidding

  1. Create Sections: Start by creating sections within your event in SAP Ariba Sourcing.
  2. Assign Sections to Envelopes: When creating a section, specify if it belongs to an envelope and which envelope it belongs to. Ensure that envelopes are used to enforce sequential viewing of responses.
  3. Define Maximum Number of Envelopes: Set the maximum number of envelopes for the event based on your requirements. You can also leave the default setting as No Envelope if sealed-envelope bidding is not required.
  4. Configure Event Rules: Ensure that the event rules reflect the correct settings for sealed-envelope bidding, such as allowing or disallowing retention of disqualified participants’ responses.
  5. Save and Publish the Event: Once you have configured the event sections and envelopes, save the settings and publish your event.

Advantages of Sealed-Envelope Bidding

  • Enhanced Fairness: Sealed-envelope bidding ensures that buyers evaluate participants’ responses in a structured and unbiased way, reducing the risk of favoritism or prejudice.
  • Regulatory Compliance: This approach aligns with legal requirements for procurement, ensuring that evaluations are conducted transparently and ethically.
  • Improved Evaluation Structure: By evaluating technical responses before financial bids, sealed-envelope bidding helps maintain a logical and effective decision-making process.

How Event Rules Impact Envelopes

Event rules play a crucial role in defining how envelopes are used in a sourcing event. For example:

  • Visibility Control: Event rules can determine whether participants’ responses in an envelope are visible to the project team. By setting these rules, you can control when and how responses are accessed.
  • Participant Management: Rules can also determine whether disqualified participants’ responses are retained or deleted. This impacts how buyers manage participant data during the selection process.
  • Sequential Requirements: Event rules enforce the sequential opening of envelopes, ensuring that buyers follow a structured evaluation process, which helps in maintaining consistency and compliance.

Summary

Sealed-envelope bidding in SAP Ariba Sourcing is a valuable tool for managing supplier responses in a structured and compliant manner. By using envelopes to control which sections of supplier responses can be viewed and in what order, buyers can evaluate participants fairly and transparently. Follow the steps outlined in this tutorial to configure sealed-envelope bidding effectively in your sourcing events.

Use sealed-envelope bidding to align with legal requirements, enhance the integrity of your bidding process, and ensure consistent and unbiased evaluations for your sourcing events.