No-bid contract - Definition and Overview

A no-bid contract is a military or government contract that is made directly with a corporation, bypassing the standard process of bidding. These contracts can be made much more quickly than a typical contract, however they are often fraught with suspicion when the company issued the contract has any ties to the administration in power at the time.

For example, after the 2003 war in Iraq, the Halliburton company, previously headed by then vice-president Dick Cheney, was issued a $2 billion no-bid contract for fuel distribution.

Speed is usually the rationale for such contracts, however, there have been examples of properly competitive contracts that have yielded a speedy conclusion, such as the development of the GBU-28 bomb, where the entire process took a couple of weeks.

Commerce Bank and Commerce National Insurance under the leadership of Vernon Hill and George Norcross have received several no-bid contracts from the state and local governments in New Jersey and Pennsylvania after making massive political contributions.

They are illegal under European Union commissioning law.