A bid request is a call for pricing offers by an individual or organization that is looking at multiple contractors for a project in order to get the best deal. Most commonly, this takes the form of a construction bid, but it is not limited to that discipline. Bids can also be requested for bonds and even general services such as landscaping and transportation. The request may be part of an open bidding process or closed bidding process, depending on the situation. It may also be known as a request for proposal (RFP).
When a project needs to be done or services are required, an entity is likely to send out a bid request to those agencies that specialize in the products or services needed. It may also be offered through trade publications within an industry, and even available on the Web site of the company or government. The request will often include a scope of the work, the acceptable time frame, and any bid bond requirements. Those bidding on a project need to ensure they understand these requirements or they may not be allowed to bid on future projects.
The request covers only the project as stated in the bid specifications, and in some cases, once the project has begun, additional work will be necessary. This often can be done through a change order by the contractor who won the original bid. If the work is considered to be an additional major project, another bid process will likely be necessary to enable other contractors to bid on the additional work just as in the original process.
Commonly, bid requests are considered closed when bidders do not initially know what the other bidders have offered. In some cases, the bidders may be able to adjust their bids after they are opened, but in others, they must simply let their bids stand as they are. Often, the lowest bidder will be successful, provided he or she has followed all the rules of the bidding procedure and has bid on all the work that was outlined in the bid specifications.
In some cases, a bid may be open, and therefore subject to a real-time process of elimination through an auction-like setting. In this case, the bidders will continue offering their services at certain costs according to the request until only one bidder is left. At that point, the bid will likely be awarded to that individual or group.
Whether the bid request is considered open or closed, the opening of the bids is often done in public, especially if the project is funded by the government. This is so all interested parties can see that no favoritism or unethical behavior is taking place. If the bidding is a closed process, those attending are only allowed to observe, not argue in favor of their bids. They may be allowed to clarify certain points, but only if asked directly.