How to Read a Solicitation Document

Bidding on government contracts can sometimes seem overwhelming, but by taking the time to familiarize your firm with the language of the bidding process, it can become much more manageable. 

Bid opportunities are created in response to a public need that has been identified by agency representatives. This need is shared with the public and vendors in the form of a bid opportunity, then, through an open competition, vendors will submit their proposals which will be read during the public bid opening and a winning firm(s) will be awarded the contract.  No matter what type of work a contract entail, understanding the basic elements and language used by government agencies during contracting is the key to understanding the whole process.  

Below are terms that are used throughout the entirety of the bid process and the contract term. You will see these terms in solicitations published through bidnet direct. It is best to familiarize yourself with them and you will be well-prepared for your government contracting experience. 

Bid Terminology: 

• Procurement – The process of acquiring goods and/or services by a government agency. 
• Bidder – A vendor (business or individual) who responds to a bid solicitation with a bid proposal. 
• Contractor – A vendor who is awarded a contract at an agreed-upon price 
• RFP – Request for Proposal: A solicitation issued by an agency for proposals from vendors, with the goal of sourcing particular goods and/or services from a winning vendor. RFPs are published according to a formalized set of standards and procedures that vendors must follow in order to be considered eligible to contract with the government. 
• RFQ – Request for Quotation: A solicitation issued by an agency to receive price quotations for specific goods and services from qualified vendors. 
• IFB – Invitation for Bid: An invitation sent from an agency to vendors to notify them of an opportunity to submit a proposal (through a bidding process) for a specific project or service. 
• ITB – Invitation to Bid: An invitation sent by an agency to qualified vendors, asking them to submit their proposal to provide a specific project or service to the agency. 
• RFI – Request for Information: A request for information sent by an agency to potential vendors regarding a potential contract opportunity. The idea is to learn about the options available for an agency’s needs regarding a contract; the responses are used to create the requirements for the actual bid solicitation. 
• Open Bid – A bid solicitation that is open to the public, allowing any interested parties to submit offers or proposals to provide goods or services that are being sought by a government agency. 
• Bid Proposal – Documents submitted by a vendor detailing an offer and proposed price to provide the goods or services sought by a buying agency. 
• Bid Opening – A formal process at a set date and time when all of the sealed offers or proposals received in response to a bid solicitation will be opened in the presence of witnesses. 
• Bid Documents – The compiled guidelines, specifications, regulations, laws and standards, formal bid proposal and related exhibits that outline the terms of the contract between a vendor and a government agency. 
• Addendums – Additional documents provided after a contract has been awarded. These often include minor changes to, or additional important details about, the contract. 
• Purchase Order (PO) – Contractual documents issued by an agency to the vendor for the purchase of goods or services. Purchase Orders usually list the vendor’s name and contact information, a description of the goods or services to be provided, the length of the contract term and the agreed upon price for the contract. 
• Preferred Source – Preferred Source refers to the purchase of goods and services from a designated vendor who meets the form, function and utility requirements of the buying agency. Preferred sources are offered contracts before other vendors and are exempt from the bidding process. 
• Sole Source – A Sole Source contract refers to when a government agency decides that only one vendor can provide the goods or service sought by the agency. Sole Source contracts do not involve a bidding process and are sometimes controversial for this reason. 
• Single Source – A purchase in which, although more than one vendor can provide the good or service, one vendor is awarded the contract over another, based on expertise and experience. 
• Centralized Contract – These are special contracts that are reserved exclusively for an established list of vendors that agencies can choose from, and to whom an agency can issue a Purchase Order without having to get prior approval. 
• Piggyback Contracts – A new contract based upon a previously established government contract; there is no bid process required for piggyback contracts. 
• Discretionary Purchases – Purchases of goods and services that are below an established dollar amount, where no formal bid process is required. 
• Advance - Advance bids are upcoming bid opportunities that are not yet publicly available. Information about advance bids is gleaned from public meetings, purchasing patterns and budget reviews. 
• Contract Award – When a contract is awarded, the Contracting Officer will notify the winning vendor with a signed notice containing the contract terms and agreed upon price in writing. 

A well-crafted bid proposal is crucial to doing business with a local, state or federal government agency. Having access to this information provides you with more lead time for preparation, as well as the possibility of discovering hard-to-find bids and RFP documents that are perfectly suited to your business’ products and services.