How to Make the Right Bid No Bid Decision

Mar 2, 2021Bid Management, Bid Writing, SME Champions, Tender Process, Tender Writing

The bid no bid decision is perhaps the most important decision you can make as part of the bid process. It’s the moment when your company decides whether to invest the time and money pursuing a tender opportunity or to look for an opportunity that is a better fit.

Sometimes, walking away from a bid is absolutely the right thing to do, but we know from talking to our small business clients across the country that knowing how to determine if a bid is right for them or not is something they struggle with. Like most things, a clear process makes making the right choices, consistently, easier. Here’s our take on that process.

Client Relationship

Vital for private-sector proposals, a prior relationship is also an important consideration when bidding for work in the public sector. If you’re the incumbent, and you’re providing a service that your client is really happy with, you’re in a far stronger position than a rank outsider – but if you’ve had some issues with the service, you may have more of a battle on your hands.

Understanding of the Client and the Opportunity

Winning bids are those that are compliant, offering everything that the client has explicitly asked for, but also meeting their unstated needs and wider ambitions. For example, if you can offer a brilliant cleaning service and reduce the use of chemicals to improve the environment, you’re aligning yourself with both the client’s needs and their wider ambitions for sustainability.

The only way to ensure your bid is both these things is to really know your client and understand the opportunity. That means a close reading of the tender documents and research to learn about their priorities. Some organisations are more transparent about this than others; local authorities, for example, will often publish a vision or mission statement that you can use to understand their priorities.

Capacity to Deliver

Looking through the requirements should give you a solid idea of what it will take to deliver the product or service – the big question is, can you do it? Would you need to recruit? If so, is that practical in the time between the contract award and the start date?

The Assessment Criteria

bid no bid decisionTender documents will usually include some guidance on how your bid will be assessed, but some tenders give more information than others. You may get as little as a table telling you that you’ll score zero for a blank response and 5 for an excellent one, or you may get detailed guidance on a question-by-question basis for what they are looking for.

Bids, where the guidance is lacking, can be an issue, as different bidders may interpret the need differently. That can lead to pricing differences where some bidders look for corners to cut to bring the price down while others focus on quality delivery. Clarification questions are a great way to counter this, asking for more detail to help level the playing field.

It’s a McDonald’s Bid and You’ve Got a Michelin Star

Bids are usually calculated to find the Most Economically Advantageous Tender, with a percentage of the bid scored on quality and the remainder on price (and occasionally other criteria such as an interview or social value). We see bids that range anywhere from 80% price, 20% quality to the inverse. Where that range sits gives you an idea of what kind of service the client is looking for.

Just as you wouldn’t send someone with a £20 dinner budget for four to a Michelin-starred restaurant, be aware that bids with a focus on price will be more swayed by a lower bottom line than a five-star service. You’ll have a better chance of winning with your quality service if you look for bids with a 60% quality/40% price split.

Profitability

The bottom line is that you need to be making money from the contracts that you win. You’ll need to carefully read the specification and calculate the price that you can deliver for – how does that fit with the information in the tender or within the pricing criteria mentioned above.

Who Is the Competition?

Who’s the incumbent and how are they performing? Who else do you expect to bid for the opportunity? How do you stack up against them? If you don’t think you can put up a good fight, then it’s time to walk away – but if you think you can rise to the occasion make sure that you use your competition’s strengths and weaknesses to inform your win strategy.

External Benefits

Sometimes you might make what looks like a poor bid no bid decision because the opportunity has external value to you. It may be that getting this tender will give you the references you need for the next stage in your growth plan, or perhaps you just want to get on a client’s radar. We’ve also had clients bid as a benchmarking exercise, just seeing how close they are to making the transition to the next stage.

Making the Bid No Bid Decision

Once you’ve gathered all the information, it’s time to make that all-important decision. At Bid for Succes, we use a matrix to get an idea of where each opportunity sits with our clients. You can download it in PDF format for your own use below:

Bid No Bid

All you need to do is select the important criteria to you and put them into the left-most column, and then score each accordingly. Total up those scores for an overall idea of where the bid sits, and you’ll soon be making confident bid no bid decisions. But, if you’re struggling, we’re here to help. We’re more than happy to take a look at an opportunity with you and work through the decision-making process, giving you our honest opinion on whether it’s right for you or not. If you’d like some support, get in touch today.

 

Adrian Corcoran

Adrian Corcoran is Managing Director and Founder of Bid for Success. Passionate about working with great businesses to win them new work, she and the Bid for Success team are here to help you with your bidding and work winning needs.

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