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How to decide whether to bid on a government tender
A simple bid/no-bid scorecard for small IT firms, with the questions that predict a win and the warning signs that mean you should walk away.
Every tender you bid on costs time you could have spent on paying clients or on a tender you are more likely to win. The firms with the best win rates are not the ones that bid on everything. They are the ones that say no early and often. A bid/no-bid decision is how you do that on purpose rather than by accident.
The four hard stops
If any of these are true, do not bid. No scorecard needed.
- You fail a mandatory requirement and cannot fix it before the closing date.
- You cannot accept a contract term that the buyer says is not negotiable, such as unlimited liability.
- You do not have time to write a response you would be proud of.
- The work is not something you do. Stretching into a new service on a public contract is a risky way to learn.
The bid/no-bid scorecard
Score each question from 0 to 3, where 0 means "no" and 3 means "clearly yes". Total the scores.
| Question | Score 0 to 3 |
|---|---|
| Have we delivered very similar work in the last three years? | |
| Can we name a reference client who will vouch for it? | |
| Do we know this buyer, or a buyer like them? | |
| Did we know about this tender before it was posted? | |
| Does the evaluation favour quality over price? | |
| Can we price it at a margin we are happy with? | |
| Is the contract size right for us (not more than about a third of our annual revenue)? | |
| Do we have the people free to deliver it if we win? | |
| Is there no strong incumbent, or is the incumbent known to be underperforming? | |
| Will winning lead to more work, such as a framework or a follow-on phase? |
24 to 30: bid, and put your best people on it. 15 to 23: bid only if you can raise the weak scores, for example by teaming with a partner. Under 15: walk away.
Warning signs of a tender you will not win
- The requirements describe one product or one supplier's way of working in unusual detail. See how to spot a tender written for someone else.
- The response time is very short for a large piece of work.
- The budget is far below what the work would really cost.
- The contract is a renewal and the incumbent has delivered well.
- You only heard about it from the portal on the day it closes.
Make the decision twice
Make a quick decision when you first read the tender, then a second one once you have read the clarification answers and drafted your approach. It is normal and healthy to stop at the second gate. The cost of stopping halfway is much lower than the cost of a weak bid that loses.
Track your win rate
Keep a simple record of every tender you look at, the score you gave it, whether you bid, and whether you won. After a dozen bids you will see which scores predict a win for your firm. Most small IT firms aim for a win rate of one in three or better on the tenders they choose.
Common questions
What is a good win rate for government tenders?
For small IT firms that qualify carefully, winning one in three to one in five bids is common. If you win fewer than one in ten, you are probably bidding on too many tenders that do not fit.
Should I bid just to get noticed by the buyer?
Rarely. A weak bid is more likely to be remembered for the wrong reasons. A better way to get noticed is to answer the buyer's market engagement or request for information, and to ask for a meeting.
Can I bid on a tender that is too big for us?
You can, but it is often better to join a larger firm as a subcontractor or to bid as a team, so that the buyer sees enough capacity to deliver.