Invitation For Bid - IFB

AAA

DEFINITION of 'Invitation For Bid - IFB'

When a company or organization provides detailed project specifications and allows contractors to send in their proposals indicating how much the project will cost to complete. Because the focus of the invitation for bid is on the bidder's price for project completion, there is less emphasis on the bidder introducing its own ideas. This separates the IFB from a request for proposal (RFP).

INVESTOPEDIA EXPLAINS 'Invitation For Bid - IFB'

Companies typically choose the qualified bidder with the lowest bid. Going with the lowest bid can result in issues if the contractor isn't of sufficient quality, so it is important for the company creating an IFB to be very clear in what qualifications a bidder should possess and what the project specifications are.


Because a well-written IFB does not focus on the bidder producing ideas, the bidder can focus on the potential costs associated with completing a project and can produce a bid faster.

RELATED TERMS
  1. Contractor Fraud

    Illegal business practices committed by firms hired to reform, ...
  2. Bilateral Contract

    A bilateral contract is a reciprocal arrangement between two ...
  3. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  4. Independent Contractor

    A self-employed taxpayer that controls his or her own employment ...
  5. Social Enterprise

    An organization that is directly involved in the sale of goods ...
  6. Corporate Credit Rating

    The opinion of an independent agency regarding the likelihood ...
Related Articles
  1. Understanding Your Insurance Contract
    Insurance

    Understanding Your Insurance Contract

  2. How To Pick The Right Lawyer
    Personal Finance

    How To Pick The Right Lawyer

  3. Advertising, Crocodiles And Moats
    Professionals

    Advertising, Crocodiles And Moats

  4. Overseas Cash Hoards: Shareholder Boon ...
    Investing

    Overseas Cash Hoards: Shareholder Boon ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center