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Making a Logical Bid or No-Bid Decision

Guest post by: Jesse Hopps

Article Overview: The decision to bid on a contract has profound implications on reputation, profitability, and the allocation of scarce resources. In many cases, these critical decisions are made following an informal assessment, resulting in low-margin or resource-intensive work being performed with associated large opportunity costs. Implementing a formalized decision-making process will help ensure that key considerations have not been ignored. To make the correct decision to bid on an opportunity, download and customize Demand Metric’s Bid or No-Bid Assessment.

Making a Logical Bid or No-Bid Decision

Making a Logical Bid or No-Bid Decision The decision to bid on a contract has profound implications on reputation, profitability, and the allocation of scarce resources. In many cases, these critical decisions are made following an informal assessment, resulting in low-margin or resource-intensive work being performed with associated large opportunity costs. Implementing a formalized decision-making process will help ensure that key considerations have not been ignored. To make the correct decision to bid on an opportunity, download and customize Demand Metric's Bid or No-Bid Assessment.

What are the Key Considerations?

• Internal Factors- Is there a strategic fit? Does senior management support the decision? Are the resources required to win and deliver in place?
• External Factors- Is the competition fierce? Does your proposal align with your prospects strategy? Are delivery requirements clearly documented?
• Risk Considerations- How much risk is involved? Are you comfortable with the technologies required to deliver on the bid? Could this be a disaster?
• Financial Considerations- Can you afford to pursue the bid? Is price a major consideration in winning the bid? Will the margins be low on this deal?

Action Plan:

1. Formalize your Decision-Making Process- Use Demand Metric's Steering Committee Charter to establish a committee for evaluating bids.
2. Evaluate Key Considerations- Use Demand Metric's Bid or No-Bid Assessment to evaluate key considerations. Don't forget to customize the template with considerations that are relevant to your business.
3. Bid or No-Bid- Make a decision based on the assessment criteria. Provided there is a strategic fit, move forward with the bid. Be sure to closely evaluate any potential 'deal killers', to be prepared for your negotiations with clients.
4. Negotiate the Deal- based on your assessment, negotiate favorable terms.

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Article Tags: allocation of scarce resources, correct decision, critical decisions, customize, decisionmaking, informal assessment, opportunity costs, profitability, profound implications



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