A bid is a proposal, tender or quotation submitted to a government agency to provide a service or product as needed. The bidding process will work similarly to a standard auction, only the bidders are companies (vendors) competing to provide the service or product at the lowest possible cost. In placing a proposal in the public sphere, the government agencies hope to fulfill their needs at the lowest cost. In turn, the vendors are hoping to turn a given bid into a successful, lucrative business deal.

Before a proposal is written, a government agency will decide whether the given job can be competed in-house without outside help. If there is a job or product outside their expertise, a proposal will be written so the job can be completed by an outside contractor – i.e. the vendor or competitive business. The vendors will then write a bid stating how long the given job will take to complete and for how much. The government agency has an advantage in this as competition will in most cases drive costs down.