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What Is a Bid Proposal?

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  • Written By: Summer Banks
  • Edited By: Michelle Arevalo
  • Last Modified Date: 31 March 2014
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A bid proposal is an explanation of the services or products offered at an estimated cost to a company. When the bid proposal is unsolicited, there is no contractual agreement between the bid recipient and its author. If the proposal is submitted in response to a request for proposal (RFP), it can be accepted as a bid later in the contracting process.

The bid proposal is often submitted with the use of a bid form. This can be handwritten or printed from software used for professional bidding. Generally, the form is completed in duplicate, with the one copy being kept on file by the bidder and the other sent to the business requesting the bid. Such a business proposal can include key points related to the completion of the job, including the time frame for completion, total cost, and materials needed to complete the job.

Depending on the type of job, the bid proposal could include a lot or a little information. A construction estimate, for instance, could include a complete list of materials needed to complete the project. A freelance writing bid, on the other hand, may list only the estimated time needed and total estimated cost.

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The professional bid proposal often includes many key elements. The bidder may choose to begin the form with an executive summary, which can be used to explain why the bidder should be chosen for the job. This may be followed with a list of qualifications, the names of any subcontractors to be used on the project, and an overview of how the bidder will accomplish the major points of the bid request.

Next, a bidder can explain the terms of the bid and include a list of similar jobs that have been completed, along with details of any past projects that are relevant to the proposed work. A safety plan may also be added, if applicable, to describe the steps that will be taken to minimize injury and any loss of work time. Such a plan is typically included only if a job will require physical work.

After the bid form is written, proofreading the information may help to insure it is complete and eliminate any spelling or grammatical errors that could be seen as unprofessional. Following this step, the bidder usually signs and submits the form. Proofreading can be a vital step because many bid proposal are not accepted because they are incomplete.

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Discuss this Article

TheGraham
Post 4

@SkittisH - I'll admit, I didn't consider the documentation aspect of things. Having everything in paper form does sound handy for a business, especially come tax time.

I haven't been ripped off by a business charging me over "consulting time" to write bid proposals, no, but I have several friends who have had to deal with excessively long haggling so that the person writing the proposals could do that.

I guess it's up to each business or contractor individually to decide whether to charge consulting fees for the time it takes them to write up bid proposals; I'm not going to be doing any business with this particular person, that's for sure.

That kind of reflects what you said about businesses using this stuff to look professional, doesn't it? That guy did a bad job of using bid proposals and made himself look unprofessional, and here I am denying him my business. Talk about seeing it in action!

Okay, I don't think of bid proposals so badly now. Thanks for taking the time to explain; sounds like you know your stuff. Hopefully at least with proposal templates out there, people can learn how to write them faster so if they do charge for their "consulting", it doesn't end up costing an arm and a leg.

SkittisH
Post 3

@TheGraham - Oh, wow, you sound so jaded! Have you had a bad experience with somebody charging you "consulting time" for a business proposal in the past? No offense intended, really, I'm just curious. It sounds like that's the case.

Thankfully, you're wrong about business proposals being a big unnecessary formality, and I'll explain why here.

Reason number one is that businesses, especially big businesses, need to carefully record all of the money they spend on things in paperwork. A bid proposal form creates that necessary piece of paperwork that lays out in no uncertain terms what the contractor offered to do the job for, and what the business agreed to pay in return for their services.

Reason number two: it lets the business and the contractor haggle. That's one of the primary reasons for bid proposal forms -- haggling in text if a business can't talk in person, and even if they can talk in person since it lets them record the "conversation" officially.

Several bid proposals from the same person might be rejected or disputed before the contractor alters them to the business's liking and everybody agrees on the final bid that is proposed.

And reason number three: You got this one right, actually. Businesses do use business proposal forms to make themselves look more professional. It's not unnecessary, though, when you consider that any business involving an exchange of services for money values its reputation above anything else.

Looking professional is the absolute most important thing, and if that means writing a few flowery business proposal forms to do so, then any business is glad to do so.

TheGraham
Post 2

I think bids and bid proposals are unnecessary. Why take up more time haggling back and forth if there's an hourly wage the person charges for their services? I mean, if they charge a certain amount, and the project will take so and so amount of time, everybody knows how much that's going to cost in the end, right?

I think the likely reason that bid proposals are still around is that they give people more excuses to charge for using up their time. Like if somebody made a proposal, they might charge the business they made it for a fee for "consulting time". That could be a way to get money out of a company even if they don't accept the bid that the proposal writer sent them!

Or maybe I'm getting this wrong? This is how it is, as I understand it. Bid proposals are a big formality kind of thing between businesses so they can both nod and shake hands over it a few times over and in the end look all "professional". Am I wrong?

SkittisH
Post 1

Ah, bid proposals.

My brother does software development and professional web site design for a living, and before each job that he takes the client requests a bid for how much he estimates it will cost.

He estimates the amount of hours the project described will take him, then he calculates based on his hourly wage, and he sends the total back to them in the form of a bid. It works just as described here on WiseGEEK.

Writing a bid proposal is often a tricky thing for people who are just starting out in a profession that operates by contract and by bid. My brother used to write his bid proposals out each time individually, but not that the business he works for has acquired more clients, he has started to use a bid proposal formatted template to give a more professional air to the operations of the business.

It seems to be working; he just signed on with client for a bid for tens of thousands of dollars for a very large project. All those who are considering whether their business proposals look professional enough, take note. It can really help you get business if your bid proposal looks sleek!

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