Apparently I need to explain this to you.
If a dude is on waivers, NOT a free agent, you can bid money on him. Then when waivers clear, the highest bidder will win his rights and use their waiver priority to grab him.
If a dude is a FA, no bidding is required. You can pick up and drop people off out of the pool as you see fit. It's ONLY on players who are pending on waivers.
It's designed so that if a player gets dropped and 6 people want him, everyone who wants him can have a shot at him, and you bid against each other.