Proposal Validity Periods in RFPs: What They Mean and Why They Matter
Almost every RFP requires your bid to remain firm for a specified period after submission. Most contractors sign this requirement without thinking about what it means if material prices move, supply chain disruptions hit, or the award takes longer than expected.
Before you price
What a proposal validity period requires
A proposal validity period clause requires you to keep your bid price firm and open for acceptance for a specified number of days after bid submission. Common periods are 60, 90, or 120 days.
During that window, the owner can accept your bid and form a binding contract at the submitted price. You cannot withdraw your bid or revise your price without the owner's agreement.
If materials you priced at month-start jump 15 percent by week eight and the owner awards the contract at week ten, you are locked in at the price you submitted.
When this creates real risk
Normal market conditions: a 60-day validity period is usually not a significant risk. Material prices do not move dramatically in two months under normal conditions.
Volatile conditions: in periods of significant price movement for materials like steel, copper, lumber, and fuel, a 90-day validity period can be a meaningful exposure. A 10 percent move in steel prices over 90 days on a steel-intensive job can turn a profitable bid into a money-loser.
Long award timelines: some public agencies take 90 to 120 days to evaluate bids and issue awards. If the validity period is shorter than their award timeline, they will ask you to extend it. You can decline, but that may cost you the award.
How to manage the risk
Price volatile materials at the time of bid. Do not use historical averages or catalog prices for steel, copper wire, or other commodities with active futures markets. Get real quotes from suppliers at bid time.
Ask suppliers for price protection. Some suppliers will hold a quote for 30 or 60 days at the bid price. Get that commitment in writing and understand what triggers it.
For long validity periods on volatile-material jobs, consider whether to add an escalation contingency that covers the expected price movement if the award is late.
If conditions change dramatically after bid submission but before award, contact the owner and request permission to revise. They may say no. But a conversation is better than performing at a catastrophic price.
On public work
On public work, bid withdrawal during the validity period is generally not permitted without forfeiting your bid bond. The bid bond secures your obligation to hold the price.
Some states allow bid withdrawal for clerical errors made without negligence. The rules are narrow and require prompt action from the bidder after bid opening. If you discover a material error after opening, get legal advice immediately.