What is the difference between a bid and a proposal?

The terms are often used interchangeably in casual conversation but have specific legal and procurement meanings in government contracting.

Bid: a formal price response to a sealed IFB (Invitation for Bid) or ITB (Invitation to Bid). The government provides fully-specified requirements; bidders respond with a price and required certifications. The award goes to the lowest responsive (met all requirements) and responsible (able to perform) bidder. No technical merit evaluation beyond the responsibility determination — price is the deciding factor. Bids must be sealed, opened publicly at a specific time, and the results are matter of public record.

Proposal: a response to an RFP (Request for Proposal) that includes both technical and price components. Technical components typically include understanding of requirements, technical approach, management plan, key personnel qualifications, past performance, and quality control approach. Price is a separate section (often submitted separately). The government evaluates using either "best value trade-off" (technical strengths can justify higher price) or "LPTA" (Lowest Price Technically Acceptable — technical is pass/fail, price wins among acceptable). Proposals are not opened publicly in the same way bids are.

Practical distinction: bids are for commodity purchases and construction where the requirement is fully specified — asphalt paving, office supply purchases, standard equipment. Proposals are for services and complex procurements where "how you do it" matters — professional services, IT development, research services, program management.

Quotation is a third term used specifically with RFQs (Requests for Quotation) — typically used for simplified acquisitions under the SAT threshold ($250K). Quotes are less formal than bids and proposals; they can often be revised through negotiation.