Bid or No-Bid: 12 Steps to Decide
There are times when it may not be advantageous to bid on a contract, even if your company is otherwise qualified to do the work. During the bidding process or bid no-bid process, carefully considering when not to bid can help you avoid wasting time and resources on opportunities that are not likely to be successful.
Some factors to consider when deciding whether to bid or not to bid on a contract. Here are 12 factors to think about before investing in the bidding process:
1. Company Strategy: Does a win on this proposal further the company’s strategic goals? A win could establish relationships, raise sales, and improve team knowledge in a target area. How does a win affect these elements? If it doesn’t meet the company’s goals, it’s a no-bid.
2. Scope: Is the project scope too large or too small for your company? Bidding on a project that is too large can stretch your resources for a win a come too thin, while bidding on a project that is too small may not be worth the effort.
3. Products or Services: Do we have the service or product that is being sought? Often businesses will stretch their abilities and spread themselves too thin. Focus on your core strengths.
4. Solution: Is your company the only one with a solution for this problem? If so, make sure you understand both how big of an issue it is and what makes yours better than other companies’ approaches. Understanding who would be most likely to buy from you will help determine if we have any chance of getting them on board with us!
Learn more about your audience in this article on qualitative research.
5. Location: Is the project located in an area that is difficult or expensive to reach? If so, this may make the project less profitable or even not worth bidding on.
6. Timeline: Does the project have an unrealistic or tight timeline? If so, this may make the project more difficult and less profitable. It could also be a red flag for unrealistic expectations.
7. The Competition: Who else is bidding on the project? If there are many large companies bidding on the same project, it may be more difficult to win. In some cases, it may be best to not bid at all.
8. Strengths and Weaknesses: Make sure to consider your company’s strengths and weaknesses when deciding whether or not to bid on a project. You can do a SWOT analysis. For example, if your company does not have experience with a certain type of work, it may be best to avoid bidding on that type of project.
You might be interested in doing a SWOT Analysis. Learn more about qualitative research services by clicking here.
9. Risk: All projects have some degree of risk, but some projects may be riskier than others. If a project is too risky, it may not be worth bidding on.
10. Potential profit: Of course, you’ll want to consider the potential profit when deciding whether or not to bid on a project. But beware of simply chasing after the highest bid—in some cases, a lower-paying project may be more profitable due to other factors (such as a shorter timeline or less competition).
11. Customer relations: Do we have a strong relationship with the customer and do you understand the procurement need from their perspective? If not, establish a relationship. Go to meetings and establish yourselves with similar institutions. You may not get this award, but you may look better to the customer for future awards if they know that you understand their needs and they know your strengths.
12. Incumbents: Is there an incumbent and is the customer happy with the incumbent’s performance? Is this a re-compete? Understand the current situation around the project or program. Be sure to understand why the project is being recompeted. If the customer is unhappy with the current vendor’s performance, was the RFP issued to deal with those problems? If there were problems in the past, there may be problems in the future. Understand why a project is up for recompete and how you will respond differently to these issues.
The decision of whether or not to bid on a contract can be a difficult one. There are many factors to consider, and it’s important to choose carefully. By taking the time to assess all of the factors involved, you can save your company time and money. When in doubt, it’s always best to consult with a bidding expert. With their help, you can make the best decision for your company.
Better bid/no-bid decisions – 3 signs that you should say ‘no’
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