To Bid or Not To Bid

Last month I discussed the process of selecting a consultant, contractor or subconsultant. This month I’ll look at the other side of the equation - how can a consultant determine whether or not to submit a proposal to an RFP/RFQ (Request for Proposal/Quote). Proposal preparation and price estimating, especially for a large project, can be time consuming. Submitting a poorly prepared bid can be worse than not submitting a bid at all, especially if you end up as the winning bid and your estimate is severely under-priced, or missing key items. Sometimes you have to respond to nearly every bid request when work is slow, or when management decides the contract would be a “prestige” project or for a “desirable” client. In my experience, such prestige projects and desirable clients often turn into a large pain in the behind for the staff stuck doing the work. To avoid wasting valuable staff time, one of my colleagues employs a pre-bid evaluation process, which I have found to be very useful. Shout out to my friends at Premier Environmental Services for sharing their valuable input.

Initial Evaluation - Does the RFP meet all the minimum Threshold Criteria?
In order for the proposal to proceed to the next step of the evaluation, all of the following threshold criteria must be met:

• Can we complete the project and meet the required schedule?
• Is the project profitable, or break-even with a good chance of additional (profitable) work?
• Are there potential or actual conflicts-of-interest?        
• Are the terms and conditions of the proposal & contract acceptable?  
• Do we understand the costs of proposal preparation and will are they recoverable?

Secondary Evaluation - Does the RFP meet the majority of the Modifying Criteria?
Provided the minimum criteria noted above are met; at least, at least six of the nine modifying criteria must be met for the proposal to proceed:

• Did we know about the bid opportunity in advance?
• Do we have a dedicated proposal leader and project manager?     
• Do we know the client’s technical and economic decision makers?
• Do we know our competition, and can we compete technically, logistically and economically?     
• Do we know the client’s decision criteria for the project and consultant selection? 
• Do we meet or exceed our competitors as to client relationship and decision criteria?      
• Can we differentiate ourselves on this proposal with a unique approach?  
• Is this a client with which we want to build or maintain a long-term relationship?   
• Is there opportunity for additional profitable work stemming from the current project?

Final Evaluation - To Bid or Not to Bid:
Once the above criteria have been successfully met, the proponent may wish to evaluate other, less tangible considerations, such as current and future workload, staff resources and availability, client rapport, consistency with company goals and marketing objectives. Lastly, the evaluation process should also assess if negative responses to the criteria can be converted to positive ones prior to the final Bid-No Bid decision and subsequent commitment of resources.

Bill Leedham, P. Geo., CESA
Bill is the Head Instructor and Course Developer for the Associated Environmental Site Assessors of Canada (www.aesac.ca); and the founder and President of Down 2 Earth Environmental Services Inc.