There are two types of offers: - bids and proposals. Bids are used in sealed bidding purchases, while proposals involve awards to be made following negotiation.

Bids and proposals always should be prepared with utmost care. Contracts awarded on erroneous offers may result in serious financial loss or other difficulty for the bidder.

Before preparing an offer, close study should be made of the specifications to be sure that all requirements can be met. Particular attention should be given to the instructions to offerors and to conditions of purchase, delivery and payment.

When determining the amount of the offer, the small firm should be especially careful to include all costs of material, labor, overhead, packaging, and transportation. Also, it should be sure to comply with such important provisions of the solicitation as submitting the required number of copies, mailing the offer in sufficient time to reach the purchasing office before the closing date, and properly tagging, marking, and mailing any required samples well in advance of the opening date.

If a firm wants to change or withdraw a bid, it may send a letter or telegram to this effect to the purchasing office.  However, the notification must reach the office prior to the time set for the bid opening.

When preparing a proposal on a negotiated procurement, the same care should be taken as with a sealed bid. However, because the negotiated purchase procedure is more flexible than the sealed bid procedure, there is greater opportunity to seek modification of specifications, conditions of purchase, or delivery and payment.

If the contracting officer decides to negotiate on a firm's proposal, a complete cost analysis may be required.  Therefore, the firm should be prepared to support the quotation with facts and figures.