Bid Optimization

I have performed thousands of bids, across a handful of industries, with a few companies, including my own.  From hundreds of dollars to billions. There are absolutely commonalities, and of course differences. I can assist in any of the following items, to strengthen your bid performance.

Risk Assessment:

These are not only for your business risk, but it also sets your brand style to the industry. The people you do business with will recognize it and respect it.

  • Identify potential risks: Conduct a thorough analysis to identify potential risks associated with the project, such as schedule delays, cost overruns, or supply chain disruptions.

  • Develop mitigation strategies: Create a plan to address and mitigate identified risks, minimizing their impact on your project.

  • Quantify risk appetite: Determine your company's tolerance for risk and adjust your bidding strategy accordingly.

  • Standardized Policy: Keep your risk appetite documented, and/or within a checklist matrix.  Your tendency to gamble because of low workload, or other reasons, is not a best plan of action. Instead use the time you would have otherwise taken the risk, on marketing to more risk aligned prospects.

  • Contract Deciphering: There is what’s written and what the client says, and what you know they need.  These may not align. Winning a bid on a client technicality oversight, will not help you long term. Be upfront with your client, making clear clarifications and exceptions.

Financial Planning:

  • Cost estimation: Accurately estimate the costs associated with the project, including labor, materials, equipment, and overhead. Sounds easy, but takes focus.

  • Obtain BAFOs:  Best And Final Offer.  Squeeze all your subcontractors, vendors, etc. try to negotiate with FedEx, Office Max, wherever you do business.  Even one half of a percent less adds to your competitive financial approach.  Assume they will say yes, before you ask.

  • Profit margin analysis: Determine the appropriate profit margin based on your company's financial goals and market conditions.

  • Cash flow management: Plan for potential cash flow challenges and develop strategies to ensure adequate liquidity.  Meaning, do not set yourself up for a negative ongoing project. If the contract or client is requiring this, perhaps your capital can not sustain it.  Ensure you know this going in.

Proposal Development:

  • Compelling value proposition: Clearly articulate the unique value your company brings to the project and how it differentiates you from competitors.

  • Strong technical response: Demonstrate your expertise and experience in the relevant areas of the project.

  • Effective communication: Tailor your proposal to the specific needs and preferences of the client, using clear and concise language.

  • Standardize: You can standardize way more than you think.  I’m not talking about boilerplate marketing fluff; I’m talking about even detailed scope writeup.  Build a platform to capture all your bids, I’m certain that you are spending lots of hours re-writing things you don’t need to.

Other Considerations:

  • Learn from past bids: Analyze previous bids to identify areas for improvement and refine your approach.  Yes, you need to do this.

  • Seek feedback: Request feedback from clients and industry experts to gain insights into your bidding process.  Its ok to ask why you lost the bid, it’s not always money.

  • Stay updated on industry trends: Keep informed about changes in the construction and engineering industry to adapt your bidding strategies accordingly.  This is working on your business and not in it.  Tradeshows to conferences and networking, they will actually help you.

  • Check your competitors:  When I was growing up in a small family-owned business, my mom would call our competitors acting as a prospective client. She data mined them, viciously!  I’m certain she loved doing it. Play this card as you wish, but knowing your competitors is key to your success.