To bid or not to bid on cold opportunities

It is an accepted truth that companies bid work to win work.  I have seen exceptions to this axiom one being that some companies seem to bid and bid and bid hoping that by submitting enough bids, the company will eventually win.

The volume of bidding work and percentage of winning work do not have a direct correlation based upon my background.  (Further, a virtually non-stop approach to bidding often ignores its impact on the well-being and morale of employees.)  

The goal of course is to bid work where the company has a higher chance of winning than your competitors’ chances of winning.  How can a company increase its odds of winning?  Let’s consider the differences between cold, warm and hot bid opportunities and how to consider them.

This discussion is presented across three articles: Managing Cold, Warm and Hot Bid Opportunities.

 What are the attributes of Cold bid opportunities?  They are:

  • Opportunity suddenly appears from a government web site, an e-mail from a market opportunity tracking subscription company, a call from a partner, subcontractor or vendor or even an unexpected request from the government to consider bidding this new opportunity.
  • Your company had no previous knowledge of this opportunity and therefore has not been tracking it.
  • You have no market intelligence for this opportunity beyond publicly available information (which all your competitors have too.)
  • This work does not have an incumbent contractor.
  • You have the requisite experience to perform this work including past performance credentials.
  • You currently have or can rent the capacity to generate a credible proposal response.

At best your odds are winning are much less than 5 percent.  Do you bid or walk away? 

Traditionally, this situation is an absolute no-bid; no doubt about it!  Your company does not know this customer; you have never met them.  You have neither insight into the customer’s hot buttons nor the context of this procurement action. An evident path to victory is quite murky.

A senior GWAC government procurement person shared during a speech, in 2012, that close to 35 percent of task orders, of all sizes, have no incumbent contractor and that despite the government’s meetings with industry, before the procurement was released for bid, often there was no favored contractor. Even when companies have worked to influence the customer’s direction and evaluation criteria, through various mechanisms, the government had not embraced a company’s approach meaning that while the government may appreciate the company’s input, again, no company was favored.

If your company has the capacity to generate a “B” bid with competitive pricing for a Cold opportunity, has the requisite knowledge and past performance, and is not burning out its own people maybe you should bid this Cold opportunity.  Your company should have a low-cost-of-sales, rapid-bidding model capability, since these Cold bid situations are becoming more common each year.

Cold bid opportunities may be passing by while the company waits for the ‘perfect deal’.  The paradox is that while a company waits for the perfect deal, which has clearer information and less bidding risk, this information may help your competitors more than you.  

Reader Comments

Mon, Nov 14, 2016 Remo Perini VA

here are ten questions a company should ask itself to see if the cold bid makes sense: 1) Do the requirements match our core capabilities? 2) do we have any teammates on other contracts that knows this customer? 3) Is there time to FOIA'd the current contract? 4) do we have significant past performance doing this type of work with usable quotes and kudos? 5) Do we have or can we find a "by name" PM that will resonate with the customer? 6) do we have any technical gaps and if so, do we have a strategy for closing them? 7) do we have technical discriminators? 8) Is this bid consistent with our strategic focus? 9) What are the execution risks? 10) Can we make money if we win?

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