Bidding is a way for businesses to compete for contracts, with the contracting company choosing the best proposal. Competitive bids are based on the lowest price, while non-competitive bids consider other factors. Shortlisted companies may give a presentation to win the contract.
In business, bidding is a recognized way of competing with other businesses for a contract to carry out a project. The contracting company examines and compares proposals from different companies to choose the company with the best overall proposal. Bidding is used for many types of work and commercial supplies, ranging from construction projects to medical equipment. Companies that invite bids from contractors or suppliers often specify how the winning bid will be chosen.
If a company is only interested in a low price for products or services, it usually asks for competitive bids. This term indicates that the winning bid will be selected at the lowest bid only. A price quote is the rate at which a contractor or supplier will provide the requested goods or services. Knowing in advance that the bid is competitive saves writers a lot of work, as other details won’t be as important in the proposal as the price quote.
Open Competitive Bidding is a business term that means that anyone who wants to view the opening of sealed bids can do so. Closed bid situations are those where only selected individuals at the receiving company of the bid view the bids. An offer is also called a proposal. Invitations to tender can be placed on the company’s website or in advertisements in trade magazines or newspapers.
When bid requests are not specified as competitive, factors other than financial will be considered. For these types of proposals, a company can use an offer form or template. This type of request for proposal (RFP) requires suppliers or contractors to fill in information on a standard form that the company uses for all requests for proposal. Non-competitive RFPs often ask for details such as response time and product specifications. The company then compares each bid proposal sheet to choose the best overall product or service offer.
Sometimes, the company requesting bids does not decide the winning proposal from the bids alone. Instead, create a short list of potential contractors or vendors. This procedure is much like a job interview process in which the interviewer narrows the search for a candidate to fill the vacancy from a short list of candidates. In an RFP bidding process, shortlisted companies usually prepare a personal presentation. The winning deal is usually the one that shows visual evidence, such as testimonials or photographs, to prove why it is the best choice for the project.
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