Bid Define: What is a Bid?

define BId

Often, at work, let’s say during an internal meeting or in an email thread, you’ll encounter the term “bid.” It may seem like a simple concept. However, we can define a bid in many different ways. After all, bids can pop up in any industry, from small entrepreneurial endeavors to Fortune 500 companies. So, how do we define bids when they can span across so many different industries and sectors? Let’s find out.

A bid, defined in its simplest form, is a proposal submitted by a vendor when responding to a request. Now, there are several types of requests. There are RFPs (Request For Proposals), RFIs (Requests for Information), and RFQs (Requests for Quotes). Sometimes, you’ll also hear ITB (Invitation to Bid). For instance, an RFP will be an outline of a product or service wanted by a company. It will also include pricing, timelines, terms and conditions, and specific details of the product or service the company wants to see in the bid it receives.

Let’s define bids as an entry form to a competition. One company will submit a bid that beats all other bids submitted by the other companies. Clients expect bidders to submit professional documents that reflect the core competencies of the requested products, services, and solutions at a reasonable price. So, bidders should aim for high-quality responses if they want to submit a competitive bid response.

Winning bids means winning contracts, which guarantees future business and work for your company or organization. Bids can be a real game-changer! So, you’ll want to make sure you understand the request and bring something valuable to the table.

Bids Define Solutions

In the procurement space, the importance of bids cannot be overstated. The process of a company getting what it needs would be nearly impossible without a bidding system. Not only is it a means to respond to a solicitation, but it is also a key driver in competition. When writing a bid, you have to put your best foot forward regarding pricing, timelines, and the product/service itself. At the end of the day, a bid should be your highest-earning salesperson delivered on paper.


In certain industries, bidding regulations are in place to ensure fairness and transparency. The bidding process allows this. Each company has access to the same solicitation, be it RFP, RFQ, or RFI. What’s more, agencies strive for complete transparency throughout the bidding process. This system allows for trust in the business process and avoids cronyism and corruption.

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Scope of Work

When bidding on an RFP, the Scope of Work (SOW) is clearly defined. The parties involved (the solicitor and bidder) are on the same page regarding cost and deliverables. In addition, this ensures that projects don’t spiral out of control, increase costs, or add unwanted or unnecessary features or services. The client also uses the scope of work to reduce the chances of contracting with an uncommunicative or underperforming bidder. What’s more, the bidder also benefits. After all, the bidder walks away with an understanding of exactly what work, services, or solutions are required to fulfill the scope of work. Outlining all requirements and stipulations in the scope of work ensures that all parties are on the same page.

Define Bids to Win

Now that we’ve defined bids, let’s take a look at what makes a bid a winner:

  • Stick to the SOW: The Scope of Work benefits both parties. The solicitor describes exactly what they need from the bidder. There is no guesswork. It’s a win-win process. However, if you wander outside the scope of work while crafting your RFP, one of two things can happen:
    1. You color outside the lines. Don’t add unnecessary items that might make the client wonder if you truly understood the intention of the solicitation. By offering products and/or services outside the scope of work, you are not supplying what the client needs or wants.
    2. You don’t color in the whole picture. The clients describe exactly what they want in the provided scope of work. If you can’t or won’t fulfill their requirements, you’ll likely lose the bid.
  • Be clear and concise: You won’t impress a future client by submitting an overly complicated bid stuffed with jargon. Would you want to read a document like that? Put yourself in the client’s shoes. Be straightforward, address each requirement with an explicit response, and answer their questions in a digestible format. You might have the exact product/service that meets their needs, but if your bid isn’t readable, it won’t matter.
  • Identify what sets you apart from your competition and focus on that: Bids are defined by competition. You are bidding for a job. Therefore, you need more than your product to make your bid a winner. What sets your bid apart from the rest? Is your pricing unique and highly competitive? Are you already established a trusted industry leader? Are you local to the requesting organization? Focus on what sets you apart from your competition. That way, you’ll set yourself apart in every step of crafting your bid.

Keep Learning

Hopefully, you now have a better idea of what defines a bid. Bids can differ by several types of solicitations, such as RFPs, RFQs, and RFIs. Keep the statement of work in mind, describe your solutions and services clearly and concisely, and demonstrate what sets you apart from other bidders. With this knowledge, let’s get out there and make some bids!

At The Bid Lab, our procurement experts have helped plenty of vendors develop focused, professional bid proposals. So, whether you’re looking for your next RFP opportunity (try our user-friendly RFP search engine, Bid Banana!) or just interested in learning more, reach out! The Bid Lab can help. Contact us for a free consultation by calling 1-844-4BIDLAB or emailing

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