It could make them contenders
If Bauer pitches like he has shown he can (2018 and 2020), he’s one of the best pitchers in baseball. Whether or not the Rockies make any other offseason moves, signing Bauer would automatically make them a better team. If they believe that they are contenders without Bauer, they would definitely be contenders if they did sign him.
Based on their play in last two years, it’s fair to say that they aren’t contenders right now but signing him could make them contenders. For any team to make the playoffs, you have to have all of the roster playing well so it’s not like Bauer would single-handedly get the Rockies to the playoffs but it would get them in the conversation of the Wild Card and depending on what other moves they and other teams in the NL West would make, the Rockies could even find themselves in contention for the division.
Currently, a lot would have to happen for that conversation to even take place (including signing Bauer and making other signings and or trades) but there’s no denying that, at bare minimum, it would make them a better team on paper.