A bid is a legal document in which a seller agrees to provide goods and/or services to a potential buyer at a specific price under specified conditions.

Bidding is an invitation to potential suppliers to submit their offers and a price for a particular opportunity.

closed bid or sealed bid is formal, written and sealed. Normally all closed bids are opened and reviewed at the same time, with the contract being awarded to the lowest bidder who meets the specifications.

An open bid is usually more informal and is used when specific requirements are hard to rigidly define or when products vary substantially.


  1. ^ American Marketing Association, AMA Dictionary.

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