When an organization or government wishes to create a big new thing or perform a big new project, they don’t do it themselves: they hire someone. How do they know who to hire? They issue a “Request for Proposal” which is precisely what it sounds like: a plea for companies to propose a solution to their problem. Real companies (often called “government contractors”) research the problem, design solutions, and then create a document that is their proposal for creating or building the “big new thing”. The government (or whoever) then chooses one of the proposals and grants that organization a “contract” to implement their solution. These contracts often run into billions of dollars.
The Space Settlement Design Competition is all about creating one of these proposals: a response to a request to build a space settlement.