RFPs or Request for Proposals are formal invitations to bid on a service or project from municipalities, schools, fire stations and most entities that are public. By holding an auction where all participants operate by the same rules prevents, what Sarah Palin would call, “crony capitalism”.
Same is true when a public entity wants to raise some capital. There's a real need for additional funds to prevent having to lay off police, teachers and fire fighters. Budgets are tight and sometimes it becomes necessary to sell an asset, even one that has a nice cash flow that in more ordinary times would be considered unheard of. But, you do what you have to do. They are right to insist that they get the best offer they can possible get.