Construction bidding glossary
Plain-English definitions of the public bidding terms contractors run into. Public construction is a $541-billion-a-year U.S. market, and the vocabulary below is how agencies describe the work. Last updated 2026-09-26.
- Solicitation
- The general term for any public notice that invites contractors to submit offers on a government project. It includes IFBs, RFPs, and RFQs.
- IFB (Invitation for Bid)
- A solicitation where the government awards the contract to the lowest responsive, responsible bidder on a fixed scope. Price is the deciding factor, and IFBs are common for straightforward construction work. Also called an ITB (Invitation to Bid).
- RFP (Request for Proposal)
- A solicitation that evaluates more than price. Technical approach, qualifications, and experience are scored alongside cost. Agencies use an RFP when they want the best overall value rather than the lowest price.
- RFQ (Request for Qualifications or Quotation)
- The abbreviation has two meanings. A Request for Qualifications asks firms for their experience so the agency can shortlist them before inviting proposals. A Request for Quotation asks for pricing on a defined, usually smaller, scope.
- Bid bond
- A surety bond, commonly 5% to 10% of the bid, that guarantees you will sign the contract and provide the required performance and payment bonds if you win. It protects the agency if the winning bidder backs out.
- Performance bond
- A surety bond, often 100% of the contract value, that guarantees the contractor will complete the work as the contract requires. Most public construction projects require one.
- Payment bond
- A surety bond that guarantees subcontractors and suppliers get paid. The federal Miller Act requires one on federal construction contracts, and most states require the same on state and local public works under their own "Little Miller Act" statutes.
- Prequalification
- A process in which the agency reviews contractors (financials, bonding capacity, past performance) before they are allowed to bid. It is common for state DOT work and large projects.
- Addendum
- An official change or clarification to a solicitation, issued before bids are due. Bidders must acknowledge every addendum, and missing one can disqualify a bid.
- Prevailing wage / Davis-Bacon
- Legally required minimum wage rates for workers on public construction. The federal Davis-Bacon Act sets them for federal jobs, and many states have their own prevailing-wage laws.
- SAM.gov UEI
- The Unique Entity ID assigned in SAM.gov (System for Award Management). It replaced the DUNS number in 2022 and is required to bid on or receive US federal contracts.
- NAICS code
- A North American Industry Classification System code that identifies the type of work in a solicitation (for example, 237310 for highway, street, and bridge construction). Agencies use it to categorize bids and to apply small-business size standards.
- Set-aside
- A contract reserved for a category of business (small business, 8(a), HUBZone, SDVOSB, or WOSB), so only qualifying firms may bid.
- Bid tabulation (bid tab)
- The public record, released after a bid opening, that lists every bid received and its price. It lets contractors see who bid what and how close the competition was.
- Plan holders list
- The list of contractors who have obtained the plans and specs for a project. Subcontractors use it to find which general contractors are bidding so they can send quotes.
- Notice to Proceed (NTP)
- The agency’s formal authorization for the winning contractor to start work, which typically starts the contract clock.
- Public works
- Construction, alteration, or repair of public infrastructure or buildings funded by a government body, such as roads, bridges, water and sewer systems, schools, and other public facilities.
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