Competitive Bidding

A common method of selecting sources for contract awards. Suppliers interested in participating in the process are asked to submit information on prices and/or other specified elements. Major public sector purchases commonly are awarded on a sealed bid basis, with the law requiring that the award be made to the lowest responsive and responsible bidder. In private sector purchasing, competitive bids are usually solicited from several suppliers with the stated intention of selecting those organizations with which negotiations subsequently will be conducted to arrive at a final contract award decision.