Match Technical Content and Price

The assumptions you make about the costs of doing the work have to be well researched and based on information that is accurate and up to date. You must control the proposed work plan and personnel inputs to avoid the risk of pricing your bid out of the competition. This means:

• thinking through the cost implications of your initial ideas about the work;

• keeping the work plan under review as it is being developed, and checking how resources are being applied in relation to the priorities of the contract;

• considering approaches such as shared risk pricing, where a programme of work that addresses the core requirements of the contract is offered at a fixed price, while other activities are priced on a time-plus-expenses basis;

• if necessary, revising and restructuring the detailed content of the work plan, the composition of the contract team and the length of their time inputs.

These processes require a careful balance of judgement if the bid is to succeed in both carrying you to the stage of contract negotiation and providing an effective basis for the performance of the work. The technical and financial parts of the bid need to be developed in parallel, with a two-way flow of feedback between their content. Developing each part in isolation may not ruin your chances of winning, but if the professional effort required by the work turns out to be more than you had assumed and you have pitched your price too low, you will run into problems.