Chapter 284: Change of Mind
On the living room couch, Lin Fan, cigarette dangling from his lips, watched Chen Jiayi with keen interest. Her intelligent eyes brimmed with wisdom.
"You first need to understand the process of bidding and the meaning of the base bid to understand how to ascertain the stakes involved."
The learned Chen Jiayi, a finance major graduate of high caliber, would have been at least a senior executive in some financial company had she not married the former mayor, Hou Changyao. Thus, she was well-versed in matters of tenders and bids.
During the last investment meeting, she had outlined the relevant development permissions and planning. Every attendee also received a corresponding development project. If interested in a particular project, one naturally hires a professional accountant afterward to calculate related costs and then, including the profit margin, participates in bidding for the project.
To prevent companies from underestimating or maliciously lowering their bids, the government also hires accountants to calculate the overall project costs. For instance, if a tunnel project, after government estimation, costs fifty million, this figure sets the threshold. Any company bidding below this cost would be automatically disqualified.
Thus, each company strategizes to calculate the development project’s costs and gains to bring their bids as close as possible to the base price. The company whose bid is closest to the base price would naturally win the bid.
"By bundling construction projects and tourism development, there opens considerable scope for manipulation. If you can secure the base bid, you essentially know the project’s expectations. Then you can simply add a portion of the cost on top of the base cost—a common practice among most companies—and what you refer to as profit is known in the industry as the brokerage fee."
Chen Jiayi, her legs parted, explained these mysteries while enjoying Zhao Jiaqi’s enthusiastic oral attentions. Her blushing face grew even rosier from the thrill.