Bid/No-Bid decisions are critical for companies to determine whether or not to pursue a particular project before committing resources. The following insights and steps can be helpful in this decision-making process.
Project Screening and Criteria
Any business following the proven Shipley (or similar) Business Development Lifecycle model will go through various gate reviews and decision gates as they evaluate a potential opportunity. These stages are designed to ensure that the business only commits the resources that it can justify based on the probability of winning.
No business should commit more resources than it is able to during any given phase throughout the process to procure a potential contract. Ultimately, once the company receives a request for proposal, they must determine whether or not they should bid on the project. This “bid/no-bid decision” requires information and intelligence gathered from multiple data sources to evaluate the project’s feasibility and potential for profitability.
All true intelligence is decision-based intelligence, meaning it must inform decision-making. If the so-called “intelligence” is not useful for informing decision-making, it’s not intelligence—it’s simply raw data. Data in itself is not valuable, it must be processed and analyzed in context to derive meaning and application.
For bid/no-bid decisions, capture managers have specific intelligence needs – such as:
- Who are the competitors? How many are there?
- What is their footprint and impact within the industry or government landscape?
- What are their relevant capabilities for fulfilling the expected requirements?
This kind of competitive intelligence is a critical part of a bid/no-bid decision. In addition to the above, it may also be helpful to determine how each potential competitor’s revenue has expanded or contracted within the main customer segments in recent years, as well as a high-level overview of their recent and relevant past performance in the market (e.g., any public snafus, or major kudos, etc.).
The Process of Information Gathering
At Richter & Company, we use a variety of open-source, publicly available data sources to help determine what companies would be potential bidders on a given program and assess their relevant capabilities. We use federal procurement data to develop an assessment of each company’s likely past performance references. We also examine bid protest decisions from the General Accountability Office (GAO) and/or federal court filings, to discover nuances of company bids (including bid prices) as well as customer evaluation practices. This kind of fact-based analysis of the competitive field empowers our clients to make smart, well-informed decisions about whether or not they should bid on a given opportunity. Moreover, if our client does decide to pursue, the data and analysis from this initial effort continues to add value down the road, by informing other decisions, such as pricing strategy and teaming decisions.
To conclude, the bid/no-bid decision-making process involves evaluating a potential project’s feasibility, the potential for profitability, associated risks, and competitor analysis. It’s by following these steps that a company can make informed decisions on whether or not to bid on a contract and maximize the chances of success.
At Richter & Company, we want to provide you with the analysis you need so that you can decide which bids are worthwhile for your business. Contact us for information on how we can help you win!
BONUS: Other Common Practices:
A Risk Assessment may also be conducted before making a bid/no bid decision. This process involves identifying potential risks associated with the project, then evaluating the likelihood and impact of those risks to determine if the company can manage these projected risks effectively, without negatively impacting the project or company.
A Bid/No-Bid Committee, comprised of senior executives and experts from various departments such as finance, legal, business operations, and manufacturing (when applicable), may be assembled to help make the ultimate bid/no-bid decision. This committee evaluates potential projects based on predetermined criteria and makes recommendations regarding whether or not to bid on various opportunities.