Responding to an RFP or RFQ can be expensive and time consuming. The financial rewards can far exceed the cost of preparing the bid response – if you win.
But what if you do not win the resulting contract?
What did it cost in dollars to prepare the losing bid response? A typical 4 or 5-person proposal team working on a month long, multi-million-dollar proposal can cost many thousands of dollars. Organizational impacts are not limited to the cost of the proposal team. Consider the time spent in finance pricing the proposal, the time spent in expediting lining up suppliers, or the time HR spent looking for the resources that would be needed to fulfill the contract, not to mention the cost of the legal and management reviews.
What else could the proposal team have worked on that would have been more productive than working on a losing RFP proposal? Was the proposal team pulled from revenue producing projects to work on the proposal? Did the proposal team decide not to respond to a different RFP that might have been won to focus on a potentially larger contract that was ultimately lost to a competitor?
Organizations simply cannot respond to every RFP or RFQ and must be selective, choosing to focus limited resources on work efforts that can actually be won.
Bid No-Bid analysis can help make the decision whether to invest the resources in the bid response.
Bid No-Bid worksheets are usually composed of a dozen or more questions relevant to the organization and its business. Each question is scored on a 1 to 10 scale with 1 being the lowest potential and 10 the highest potential. The scores are then tallied and must usually achieve a certain minimum score to be considered winnable.
For example, a question might be: How well do our products or services fit the requirements? This might be scored as a 7 if the responding organization’s products or services “mostly” fulfills the RFP requirements, but not all of them. A lower score of 3 indicates the products or services do not fulfill the RFP requirements.
Here is a sample list of Bid No-Bid questions:
- How well do our products or services fit the requirements?
- What is our estimated probability of winning?
- Is this a strategic account that we must win?
- Do we have the resources to produce the proposal?
- Do we know the customer’s budget?
- Do we know who we will be competing against?
- Have we done previous work for this customer?
- Was the customer happy with our previous work?
- Is a benchmark or demonstration required?
- Is a bid bond required?
In this case there are 10 questions adding up to 100 potential points. The resulting scores indicate Bid or No-Bid:
- 0 to 40 might indicate No Bid
- 41 to 65 might indicate Possible Bid
- 66 or higher probably indicates Bid
Modify the scoring as required to meet your organization’s requirements.
The questions are usually discussed and scored in a group Bid No-Bid meeting with the senior manager or sponsor making the final to Bid or No-Bid decision.