Usually those using bids in the course of their work day are companies that are in certain types of service markets. Construction, plumbing, landscaping, and eletricians, are some to name a few.
Those businesses work with a variety of offers that they submit for acceptance when trying to obtain work for their company. Proposals, quotes, and bids are the types of documents that they might submit for review.
Quotes are like estimates. They are not a promise to do the work if accepted no more than they are a promise that the quoted amount will be the final amount once the job is done.
Proposals are not binding in the amount either, but also give the company that is submitting the document the opportunity to make suggestions on how it is to be done. If the company receiving the proposal likes what he sees, then he will accept the proposal and negotiations will begin on how much it will actually cost.
Bids are more set. The company that is wanting the work, knows what they want and just wants to find the best company with the lowest price. The amount stated in the bid is binding and is the only amount that can be charged.
To make a contract bid, you must follow the instructions that come in the bid packet that you are given. The packet will explain what the company requires of the job and the time allotted to completing it. It might even go so far as to state the types of materials it wants you to use in the project.
You fill out the bid contract and all other required documents including how much you would charge for the project. It is then turned in to the requesting company in a sealed envelope. All bids have a deadline that cannot be crossed. Once the deadline date and time is up, no other bids will be accepted.
Once you have turned in a bid, there is no going back. It is out of your hands. The bids will be kept by the company that was requesting the work until the deadline.
Once time is up, they will open up all the bids. It is usually custom to go with the lowest bidder, unless it is proven that the bidder is incapable of doing the work.