competitive bidding(redirected from open competitive selection)
Also found in: Encyclopedia.
A sealed bid, given to an issuer by an underwriter, containing a prospective price and terms for a contract. At the close date of bidding, the issuer picks the best offer. U.S. Government agencies are usually required to use this process and award the contract to the least expensive option. This is also used for various other ventures, from IPOs to project finance.
1. A method by 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.