City of Houston Strategic Procurement Division

Glossary of Bid and Bid-Related Terms

Best Bid:
Bidder has submitted a bid containing several variables or components (discounts, wage rates, material
costs, etc.) that are not necessarily all low but in combination is the best bid.

Best Discount:
Bidder has submitted the lowest combination of discounts on a price list contract usually verified by
comparison of sample pricing of high volume items submitted by user departments.

Captive Replacement Parts:
Supplier is only available source that can meet user department contract requirements, i.e., must carry local
stock of equipment specific replacement parts.

For purchases above $25,000 - an emergency exists only in case of a public calamity, where it becomes
necessary to act at once to appropriate money (a) to relieve the necessity of the citizens, (b) to preserve
the property of the City, (c) to preserve or protect the public health and safety of the citizens of the City or (d) in case of unforeseen damage to public property, machinery or equipment, as specified by state law.
For purchases $25,000 and below - an emergency exists in the same circumstances stated in (1) above and
other emergencies where immediate action must be taken (a) to ensure the continued service and operation
of the City, (b) to avoid any significant increase in the cost of city operations, (c) to preserve perishable food
products or (d) in general, to protect or preserve the interests of the City.

Low Bid:
Bidder has submitted the lowest total amount for each item bid.

Low Bid Meeting Specification:
Bidder has met all conditions of bid and has submitted the lowest bid that complies with the
specifications when a lower bid has been received that is not in compliance.

Low Complete Bid:
Bidder has bid all items, is lowest of those bidders having submitted complete bids and value of contract
does not warrant a split award to accommodate a lower incomplete bid.

Low Overall Bid:
Bidder has not submitted the lowest total amount for every item bid but the sum of the item amounts is low.

Low Resident Bidder:
Preference is given to City of Houston suppliers in breaking tie bids with other than City bidders.

Low Texas Resident Bidder:
Bidder from Texas is low after a lower bid from a state having a bid preference is adjusted under the provisions of the Texas reciprocal bid preference law.

Non-Responsible Bid:
Bidder has been rule non-responsible by City Council at request of a department usually for proven improprieties with respect to past dealings with the City or a breach of contract.

Sole Bid:
Only one bid received in response to a solicitation.

Sole Source:
Supplier is the only source for contract item, i.e. patented or copyright product.

Surety Bond Types

Bid Bond:
Guarantees a bidder will enter into a contract are recommended for award.

Performance Bond:
Guarantees contractor will complete the scope of the contract in accordance with the terms and conditions.

Payment Bond:
Guarantees that subcontractors of the prime contractor will be paid for labor and materials.

Maintenance Bond:
Guarantees that maintenance required beyond completion of an installation is performed for the duration
of the contract.

Supply Contract Bond:
Used for commodities to guarantee delivery.

Fidelity Bond:
Guarantees protection against misappropriation of City assets entrusted to a contractor.