To Bid or Not to Bid?

With a wealth of opportunities on offer, it’s easy to forget that you don’t have to bid for every contract. Take a look at Andrew Morrison’s top tips on when to hold back:

When might you decline to bid an opportunity? To achieve a high bid win rate, you will also need to establish effective Bid / No Bid decision gates. What elements could cause you not to submit a bid for an opportunity?

These can include:

  • Lack of site information – It is in neither clients’ nor contractors’ interests for caveated, qualified bids to be submitted. This can happen when there is insufficient information provided e.g. legal ownership of the site; location of underground services; access arrangements, etc. Many contractors will No Bid where they do not have the necessary information to submit an unqualified bid.
  • Poor quality design information – If working drawings are difficult to read, clients are increasing the chances of No Bids.
  • Quality v Price ratio – If quality is important (and who would say it is not?), this needs to be reflected in the Quality vs Price ratio. How often do any of us make personal buying decisions based on the cheapest price?
  • Design & Build ability – Is it buildable to the design? Do you feel it needs changed? Is it possible for your build team to deliver e.g. roof pitches, sewers, etc.
  • Decision making – Clients can establish a poor reputation by taking months to make a tender decision. Contractors have obtained prices from their sub-contractors and materials suppliers – these prices are moving upwards, so clients that are known for protracted decision-making processes may get No Bids. Sub-contractors will not sit idle waiting on a protracted decision – they will take on other work instead. Also, detailed feedback needs to be given by both clients and contractors on tender losses and no bid decisions.
  • Materials and specifications – Some specifications are not fit for purpose. There are materials shortages and unintended consequences of certain specifications. More attention should be given to whole life costings as “cheapest” is often not that in the long run.
  • Risk – Some clients are looking to pass on all the risks to the contractors. Given that many contractors can pick and choose what they bid on, clients can make their opportunities more attractive by sharing some of the risk. Contractors will choose to work with clients who understand design and build risks.
  • Lack of bid resources – During the recession, many contractors reduced their bid resource. Scaling this resource back up to match the opportunities is not always easy to achieve. Of course, this is where external bid specialists can be engaged to support increased bid activity.