Hiya,
The bid is high, but you're basically paying someone to design a device from an idea/concept to something manufacture-able. This is called "NRE" and $5k is pretty low as far as NREs go.
What you get when you have ME do this, is roughly outlined in the milestones.
I'm located in Japan, and I have small lot production capabilities for prototypes/testing, as well as rework equipment for fixing problems, quick turn PCB prototyping in as little as 48 hours, same-day PCB assembly, etc. See profile for more details.
The schematics and PCB layout would be done in Altium Designer. All design data (sch, pcb, project, datasheets, project notes, source code, etc) will be handed over at the end of the project. Partial non-essential data such as gerber files, compiled firmware (hex), etc will be provided for each milestone as appropriate.
Parts for prototype assembly can be dropshipped to Japan from Digikey or Mouser, we have stock of common parts (resistors+caps), so only specialized parts will be needed. Can also source needed parts, we've got several shipments a week from China (when they're not on holiday) with 2-5 days delivery time. Hardware will be "designed for manufacturing", to optimize component count, PCB size, parts placement, to make sure it can be assembled in volume cheaply and easily.
For hardware, appropriate (after discussion) STM32 MCU will be used, with bluetooth or OTG connection to phone. Firmware will be made with Keil.
Feel free to message w/ questions.