How do you decide the level at which to set your bid budget?
How much is enough, and how much is too much?
If you’d had variable success in compiling your own bids in the past, would you spend £20k with a consultant on going all-out to win £30 million of work? Or would you limit the bid budget to £5k?
An industry colleague was approached to work with a supplier on a framework bid. A major multinational, that the supplier had recently begun to work with, needed to expand their supply chain to prepare for an imminent increase in workload due to additional investment in their sector. Having already forged a relationship with the multinational, started recruiting local people, and established a small regional office, the supplier was keen to secure a place on the framework to avoid missing out on future work.
The supplier had a foot in the door, but nothing was guaranteed. A place on the framework was realistically worth anywhere from £15 million- £40 million over the next four years. Maybe even more when you consider the added value of that experience across other regions. This was a ‘must-win’ if there ever was such a thing! The framework ITT was quite demanding, requiring many pages of information, CVs, previous case studies etc… The supplier, having experienced variable success on previous in-house bids (with wildly different quality scores) decided to enlist the services of an experienced bid writer.
With 25 working days until the submission deadline and reams of information to pull together, the tender launch meeting was held. Those in attendance agreed a strategy, authors, reviewers etc… Everyone understood the need to put in their best work. The bid writer estimated a budget of around £20k would be reasonable, given the amount of work to do.
But then the supplier’s MD, who was not at the meeting, imposed a bid budget of just £5k – severely limiting the ability of the bid writer to provide anything but the most light-touch input. ‘We just need to tweak our content to get this one over the line’, was the reason given. No amount of logic or argument would persuade the MD otherwise. Neither would he be drawn on where he thought ‘the line’ was.
If (and it’s a big ‘IF’) the submission made it over that elusive ‘line’, the gamble would pay off. For just £5k the MD will have saved £15k AND got four years’ extra work. Happy days.
But if I were a gambling man, my money would be elsewhere.
I’d bet that their competitors would be happy to invest serious money to bring in £30m of future work. The smarter ones will have been working on the bid way before the ITT was published.
Given those probabilities, the picture is likely far less rosy. The MD risked losing work, having to shut the new regional office and lay off their local team. AND they’d have wasted £5k for nothing.
What would you do?
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