Definition: A bid is an offer or proposal with particular conditions that pursue an opportunity to provide a good or service. In business terms, a bid is commonly known as an application presented by a person or a firm to a bid solicitor with the aim of being selected as a supplier.
What Does Bid Mean in Business?
Bidding processes are very common in government procurement. They are often used to improve transparency and guarantee better quality. However, a bid solicitor can be any private or public institution or even an individual that requires a product or a service. The solicitor commonly notifies about the specific procurement requirements to potential suppliers and provides bid terms, which are minimum requisites to participate in the selection process.
The bidders are interested companies that present their bids according to conditions and time previously defined by the solicitor. A typical bid should include evidence about past successful jobs performed, past and current clients, available resources to execute the required work and any other information proving that requisites are not only met but even exceeded.
Efficient Services Inc. is a company that has been operating for five years. It primarily provides maintenance services to roads and highways with an up-to-date technique that minimizes time while achieving excellent results. Efficient Services read in the local newspaper that the municipality would open a bidding process in a month in order to sign a one-year contract for road maintenance.
The company was very interested because there was a large amount of money involved in the contract. It therefore prepared a document where their best qualifications were presented and sent the file to the municipality two days before the deadline. Although other four companies were competing in the process, Efficient Services was the selected one. The employees in charge of the selection admitted that the winner company was the smallest and the youngest within the group.
In cost terms it was in line with the average. However, the company had the best service time because every maintenance work is planned to last 25% less than its competitors. Because of the shorter time, citizens’ daily routines will be less affected. Indeed, the time criterion was the key to grant the contract to Efficient Services.