The Procurement Glossary » Bid

Bid

Sourcing & RFx

Definition

A supplier's formal priced response to a sourcing request, stating what it will supply, at what price and on what terms.

Explanation

A bid is the unit of comparison in competitive sourcing. Buyers evaluate bids against the specification and award criteria; a compliant bid meets all mandatory requirements, while a non-compliant one may be disqualified regardless of price.

Example

Three of the five bids met the delivery deadline; the cheapest of those three won the award.

Related terms

• Request for Quotation (RFQ) — A sourcing document that asks multiple suppliers to price the same clearly-specified requirement so their bids are directly comparable.
• Tender — A formal, often public, invitation for suppliers to submit competitive offers for a defined contract, common in government and large-enterprise buying.
• Bid Bond — A guarantee submitted with a bid that the bidder will honour its offer and enter the contract if selected.
• Evaluation Criteria — The defined factors — and their relative weights — used to score and compare supplier bids or proposals.

Frequently Asked Questions

What is Bid?

A supplier's formal priced response to a sourcing request, stating what it will supply, at what price and on what terms. A bid is the unit of comparison in competitive sourcing. Buyers evaluate bids against the specification and award criteria; a compliant bid meets all mandatory requirements, while a non-compliant one may be disqualified regardless of price.

Can you give an example of Bid?

Three of the five bids met the delivery deadline; the cheapest of those three won the award.

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