To Bid, or Not to Bid: Three Thoughts

Bid, or Not to Bid

To bid, or Not to Bid Requires a Well-founded Decision Process

One of the first questions all stakeholders ask is, “bid, or not to bid on this opportunity?” Since you cannot win if you do not bid, the pressure to say yes is high and often the expected answer is yes. However, you want your bid decision to support your strategic plan and have a high win probability so you can grow your business. Sometimes the decision is easy – the opportunity is part of your deliberate strategy and you have been moving it through your capture process for months (or even years). Other times it is an emerging target or market that looks good. However, each bid decision represents a significant investment in resources and should be made carefully. Here are three thoughts to aid in the bid, or not to bid decision process.

  1. Deliberate Strategic Opportunities – These represent your “must win” opportunities and a significant portion of your bid and proposal budget. Limit these opportunities to the ones with the highest value and cull out the lower value ones. Work in advance of release of the request for proposal (RFP) to improve the win probability: solutions, price-to-win, win themes, etc. Ensure the opportunities have the right fit, value, and risk for your company. Continuously evaluate the validity of your assumptions on the external factors beyond your control remain valid: RFP release dates, scope, contract vehicles, laws and regulations, etc. If it fits within your deliberate strategic plan, then bid…
  2. Emerging Strategic Opportunities – Emerging opportunities are often distractions and a drain on resources if they are not strategic. They come from a variety of sources and often they sound like they were written for your company. They include opportunities that you may have tracked, but have not adequately captured when the RFP is suddenly released. Bidding on too many of these – a throw everything against the wall to see what sticks strategy – results in fewer wins. However, true emerging strategic opportunities can lead to new markets and big growth. Leaders need to assess the win probability and ultimate value of pursing the emerging lead. If it is a true emerging strategic opportunity, then bid…
  3. Marshall the Resources – If the deliberate or emerging strategic opportunity results in a positive bid decision, you need to have resources to write a winning proposal. Resources include qualifications, teammates, proposal staff, key program lead personnel, money, time, etc. When you develop your bid and proposal budget, program a portion for emerging strategic opportunities. Remember, without adequate resources, you cannot write a compelling proposal. If it is part of your deliberate or emerging strategy and you have the resources to write a winning proposal, then bid…

The bid, or not to bid decision process should not be an easy one. Don’t be afraid to say no, even on an opportunity that has been in the pipeline for a long time. Ask if it qualifies as a deliberate or strategic opportunity. Ask if you have adequate resources to write a winning proposal. If yes to these, then say yes.

Kenneth Merwin
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2 Responses to “To Bid, or Not to Bid: Three Thoughts”

  1. Bill Boggs

    All excellent points. Two other factors to consider are Pgo, the probability that the Customer will follow through with a funded contract, and Pte, the probability of your company to execute the contract within cost and schedule budgets. Both Pgo and Pte need to be very high probabilities (>0.9) before bidding.

  2. Steve Canerossi

    Ken and Bill, you both point out important factors in making the bid / no bid decision. I’ll offer two more; white space customer and white space solution. If your company has no prior experience with the customer or with the solution your PWin will be low and you should go in to the analysis with a no bid bias. Your team will need to formulate very compelling reasons to overcome your lack of familiarity to reach a “let’s bid on this one” decision. If it’s a double white space opportunity, i.e., new customer and new solution, run away, don’t look back, it’s a no bid.