The decision to bid on a project should not be taken lightly. You invest time and resources into putting together your bids, so it is important to make sure that you are targeting the right projects. This will ensure no regret later down the road. The decision to bid needs to be objective and realistic, not subjective. Passion for a project does not mean that it is suited for the company’s best interests. One easy way to stay objective is by conducting a thorough bid/no bid analysis that meets company goals while also staying true to long-term strategy.
Bid Decision Factors
In order to make the best bid or no bid decision, it is important that you take into account a number of factors. These objective criteria help keep your decision from being subjective and based on bias rather than expertise.
These decision factors are listed below:
The Profitability Factor
Making a profit is the goal of any business, but it is especially important when you have devoted time and money to get there. If your company cannot recoup these costs through project profits, what incentive do investors have? It is easy to underestimate the cost of a project when you are working from just an estimate.
Make sure that your account for annual labor and equipment costs will allow accurate estimations. When you are calculating labor costs, be sure to include all the taxes and benefits that employees receive. You must consider other variables like location, contract requirement, and planned method of construction to determine if the job will be profitable for you.
The Capability Factor
Now that you have determined if your company is capable of doing the project work, it is time to look into how much money can be made on this. Make sure you have enough people, equipment, and resources in place to get the job done when construction is expected to commence. If you want to be sure your company can handle the project, it needs adequate cash flow and bonding capacity.
The Historical Analysis Factor
Recall why some bids were winners and why others did not. To submit better bids and win more work, you should always keep records of all your bids. It is important for a company’s success that they have such an understanding. Many factors can influence their loss in bid such as whether there was a lack of experience or if the price was not low enough. Recall past successes and ask whether things were done well or was there a need for improvement to stay within budget, etc.
The Long-Term Strategy Factor
The key to a successful project is looking at your company’s long-term goals and whether they align with the needs of this particular client. Are you wanting to merely maintain a current level of success, or do you wish to grow? Every company needs to have a long-term strategy. But it is just as important for them to identify and go after projects that align with their goals.
The Risk Assessment Factor
There are many risks that could arise on a project, such as incomplete construction documents or unknown site conditions. Review the bidding documents and plans for the project before deciding whether to bid so you know what is involved with completing each task adequately. Avoid common mistakes that can lead to a less than perfect project.
Bid Decision Importance
Bid management is an essential part of the process to ensure a successful proposal. Essential for your company’s bid, compliance with all requirements should be reached for it to have a high chance at winning against other competitors. But without a smart consideration of these five key factors discussed above, no one will be prepared to bid successfully on a project.
You invest a great deal of time and resources into putting together bids. It is important to make sure you are selecting the right projects that align with your company’s goals. One way to ensure this is by conducting an informed bid/no bid analysis that meets your goals while staying true to your long-term strategy going forward.
Smart bid management is essential to the successful preparation of a winning proposal. When it comes to ensuring a high probability of winning an RFP contract (Pwin), complete compliance can make or break your proposal. The Proposal & Contracts Suite is an out-of-the-box solution for proposal managers. Developed by Scion Analytics, the suite can help ensure Pwin by quickly creating a compliance matrix for efficient and accurate contract bidding.