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).

BREAKING DOWN '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. Independent Contractor

    A self-employed taxpayer that controls his or her own employment ...
  4. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  5. Behavioral Modeling

    Using available and relevant consumer and business spending data ...
  6. Business Guarantee

    A credit card agreement in which any debts accrued on a corporate ...
Related Articles
  1. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  2. Personal Finance

    How To Pick The Right Lawyer

    Find out what factors to consider before hiring an attorney.
  3. Investing Basics

    What's a Holding Company?

    A holding company is a corporation that owns enough voting stock in another company to control its management and policies.
  4. Economics

    How Does a Credit Facility Work?

    A credit facility is a loan or collection of loans a business or corporation takes to generate capital over an extended period of time.
  5. Professionals

    Are Stock Buybacks Always Good for Shareholders?

    Stock buyback programs aren't always done with the interests of shareholders in mind. It's important to try to understand the motivation behind such moves.
  6. Personal Finance

    6 Websites Where You Can Book a Private Jet

    These sites can help you get the flights and destinations you desire – and sometimes, even just a seat instead of a whole plane.
  7. Personal Finance

    The Innovation Powering Honda's Sexy New Jet

    Honda is entering aviation with the HondaJet. Here's a quick introduction to its unique technology and how it was developed.
  8. Investing News

    Apple’s New Business: Bonds

    Apple and Oracle are using their massive cash piles to buy up corporate debt. With bond markets looking increasingly rickety, what effect could this have?
  9. Professionals

    What Does Corporate Finance Do?

    Corporate finance is the subset of finance that involves how corporations use leverage to fund their operations and capital purchases.
  10. Economics

    Explaining Net Operating Profit After Tax

    Net operating profit after tax (NOPAT) describes a company’s potential cash earnings.
RELATED FAQS
  1. What is the difference between a green field and a brown field investment?

    Green-field and brown-field investments are two different types of foreign direct investment, or FDI. Green-field investments ... Read Full Answer >>
  2. What does it mean when advertisers say that "financing is available"? Should I trust ...

    When an advertisement says "financing", it means that the seller is going to give you a loan on an item that you purchase. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  2. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  3. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  4. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  5. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  6. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!