Bid / No Bid, decide with the head or with the heart?

Sales people are enthusiastic – rightfully so – and therefore would take Bid / No Bid decisions with the heart. Decisions with the heart are normally good for motivation. And this is essential to fight hard on a tender with lots of strong competitors. But should we really follow (only) the heart? And are all the hearts of the team beating in tune?

Certainly not! Bidding is an expensive activity. Companies have to control the costs of this “overhead” activity to remain competitive. Consequently, resources are limited and choices have to be made. A bit of objectivity in making the choices is more than welcome.

Typically, companies organize a Bid / No Bid meeting before starting to work. In the following post, we had explained how Contract Risk Scoring can help you:

Contract Risk Scoring, how can it help you in your decision process?

Let’s see what Paul Rigo, a colleague adviser based in Australia, has to say on the subject (original message on Linkedin):

To Bid or Not to Bid – That is the question

Given the current market conditions, it is tempting for businesses to submit a proposal for every opportunity that they become aware of.

Such a simplistic approach is often not the best use of finite resources or one that will lead to securing the package of work.

Contract training / Negotiation training

The following are some key considerations when deciding whether to bid or not to bid:

• Why do we want to do this package of work?
• Is it a strategically important opportunity for us in terms of customer or market?
• Does the work have a future? Is it commercially viable? Is it funded?
• Do we have the best people available to successfully deliver the work?
• Is it a commercially attractive package of work for us?
• Are the customer’s expectations of cost and schedule achievable?
• If a competitive bid, how many competitors are there?
• What will the proposal cost to prepare?
• What happens if we do NOT bid?
• Have we undertaken proper risk assessments for the work and for our business should we secure the work?

These considerations are a useful starting point for the type of questions / analysis which needs to be undertaken before a decision to bid or not to bid is taken.

Click here to read other publications on bidding / tendering on this blog.

About AfiTaC

AfiTaC.com is the blog on commercial and contractual subjects for the Project Businesses (Construction, Infrastructure, Oil & Gas, Power & Renewable, Water Supply & Sanitation, etc). Its objective is to stimulate reflection, learning, convergence to balanced contracts and positive dispute resolution. You can subscribe to our newsletter by writing to “newsletter@afitac.com”. You can also connect to our LinkedIn page. Engagement with the readers is what keeps us going. So, don’t hesitate to exchange with us by commenting here below, liking our publication on LinkedIn and writing to us “info@afitac.com”.