Proposal Predicament – How Low Should I Bid?

For companies that are bidding on Government contracts, this is a question that you seem to be asking more these days than ever before. Blame it on reduced Government spending, shrinking budgets, more companies competing for less opportunities, or companies looking for more ways to grow their businesses. Whatever the reason, the trend is strong for lowest pricing. While all companies we talk with want to win more business, they want to win it and make money too. We are often asked, how low should I bid? The short answer is, it depends. Here are five factors you need to examine when you are considering the answer to this question.

1. How can you make money if you bid that low? You ought to be asking yourself what does it cost you to perform the work first. Armed with that information, you can intelligently go from there. But first you have to be honest with yourself about the bare minimum you need to accomplish the work objectives, rather than the pie-in-the-sky greatness you might have in mind. Be candid too about what it really takes for your company to win it once you know what it takes to execute effectively. Oftentimes, that price is considerably lower than you initially think. Get aggressive once you know the cost of doing business.

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