A competitive bidding issue occurs when a firm announces the size and terms of a proposed security sale and then solicits bids from investment banks to underwrite the issue. Once it accepts a bid, the firm proceeds with the sale just as for a firm commitment underwriting. The competition among banks may reduce the costs of floating the issue. Competitive bid underwriting involves no positive certification effect, as a bank must commit to a price before it can adequately perform its due diligence review and investigate the issuer. Unfortunately, few firms other than US utility companies and French public companies sell seasoned equity by competitive bidding (both of these classes of firms are required by law to seek bids to float security issues).