The IFAMD Certificate

for industrial Goods Tenders

The IFAMD Certificate

The IFAMD awards a certificate to tender processes that comply with certain basic voluntary rules that are motivated by game theory. The certificate signals to participating bidders that the tender is designed to maximise competition while at the same time safeguarding a maximum amount of fairness.

The following basic requirements must be met for a tender process to be eligible for the IFAMD quality certificate:

Negotiation design / mechanism design:
Game theory, as well as negotiation and auction theory provide a wealth of negotiation and auction models, each of which will yield different results in different competitive settings. The IFAMD certificate guarantees the application of a comprehensive and clearly defined negotiation and decision process, which is communicated transparently to all participating parties.

Potential suppliers and their offers are to be evaluated based on the total value of ownership approach. This results in a bonus or penalty for each supplier, which is used in the negotiation stage to adjust the competition argument.

Each participant in the final round of negotiations receives a contract which commits the buyer to the decision process that was previously communicated.