competitive bidding

1. A method in which a corporation or government organization wishing to sell securities in the primary market chooses an investment banker for the sale on the basis of the best price submitted by interested investment bankers. Municipal governments and public utilities are often required to ask for competitive bids on new security issues. See also negotiated offering.
2. The bidding on U.S. Treasury securities in which an investor stipulates a particular price or yield.
3. A method by which a contractor submits a sealed bid to a purchaser. The bid includes the price and terms, such as a payment schedule.