Real answers about bid decisions, win rates, bid prep costs, and the opportunity cost of chasing the wrong work.
Score expected value: P(win) × job profit − bid cost − opportunity cost. If EV is negative, do not bid.
The scorer walks you through each factor so you see exactly where the decision flips. If you cannot estimate win probability within 10 points, you do not know the market well enough to bid confidently — gather more intel first.
20–30% is healthy for competitive bidding. Below 15% means you are chasing work you cannot win or pricing too low to sustain. Above 40% means you might be underpricing — leaving money on the table that competitors are capturing.
Track win rate by project type and client. A 35% rate on repeat clients and 12% on new markets tells you where to focus. Blindly chasing every RFP that comes in is how profitable contractors go broke.
Rule of thumb: 1–3% of the project value for detailed bids. Under $50k projects, cap at 5%. If you are spending more, either your process is inefficient or the project is too complex for your current capacity.
Track actual bid costs against this benchmark — if they creep above 5%, you are over-engineering your proposals.
Red flags:
· Payment terms over 60 days
· Unclear scope with no Q&A process
· Owner requiring bonds you cannot get
· More than 5 competitors you know undercut on price
· Win probability under 10% for a job that ties up your crew
Also walk if the client has a history of slow pay, scope disputes, or change-order refusals. A no-bid is not a loss — it is capital preserved for a better opportunity.
Opportunity cost is the profit you would earn on work you could be doing instead.
Total opportunity cost = bid prep hours × profit/hour + foregone job profit during commitment period.