Invitation For Bid - IFB
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.