What effect is generally expected when there is a higher number of bids submitted for a contract?

When a higher number of bids are submitted for a contract, the competitive environment typically drives prices down. This is because multiple suppliers competing for the same contract are likely to lower their bids to win the business. As a result, the purchasing entity can often secure a better price for the products or services they are looking to acquire.

This phenomenon is rooted in basic economic principles of supply and demand where increased competition among suppliers generally leads to more favorable pricing. Additionally, with more bids, the buyer is in a better position to negotiate and may choose lower-priced options without compromising on quality.

While lower purchase costs can be a result of competition, it does not inherently guarantee higher product quality just because multiple bids are received. Quality will depend on the suppliers' capabilities, not the number of bids alone. Therefore, the most reliable expectation with an increase in bids is a decrease in purchase cost, making lower purchase cost the correct assessment in this scenario.