What does an 'estimate' represent in a procurement context?

In a procurement context, an 'estimate' represents a supplier's best guess at what the price will be, without legal standing. This means that when suppliers provide an estimate, they are using their experience, knowledge, and current market conditions to suggest a potential price for goods or services. However, because it is not a firm agreement, it does not hold any legal obligation on either party.

This distinguishes estimates from price agreements or quotes, which may carry legal implications or can be negotiated. Estimates serve primarily as a useful tool for buyers to gauge potential costs and budget accordingly, but they are inherently flexible and subject to change as negotiations progress or as more detailed information becomes available.