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Winning Bid Criteria Explained

Austin, TX
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In a recently published white paper What Insiders Know About Winning Government Contracts (And You Should Too) we shared some interesting stats about government spending and how agencies select a winning bid. Today we are going to explore the latter in greater detail and break down the criteria for a better understanding of the bid process.  

Becoming more and more popular among government agencies is the Best Value (BV) method. In this instance a winning bid is awarded based on criteria in which decision makers not only consider a suppliers proposed price, but qualifications such as your categorical expertise and resources, past performance track record, and relevant certifications. Let’s explore each of these and explain them a bit more.

Proposed Price

While price or better yet the lowest price has traditionally been the driving factor behind an agencies selection, it has now become just a portion of contributing factors. In other words, coming in as the cheapest supplier doesn’t guarantee you a winning bid.

Categorical Expertise and Resources

An agency wants to know, is this an area in which your company is a key player or is this your first time bidding on a project of this nature? An agency will want a company with industry expertise and knowhow. This is where it becomes crucial to establish yourself with smaller contracts before going after bigger ones. Build up your reputation and increase your chances scoring the winning bid.   

Past Performance Track Record

Think of this as references. What would past or current clients say about you and your work? Do they have good reviews and positive feedback about how you performed while under contract? If not, having the lowest price and experience is not going to help you. It is important to keep up on communication with your clients, and make sure you are delivering on the promises made that help you win that contract. Keep your change orders to a minimum and stay on budget as best as possible to keep your client happy and spreading the word on your capabilities.  

Relevant Certifications

This is pretty self-explanatory. Certain agencies may require you to possess specific certifications in order to do the job. Do you have a SBA Minority Owned Business Certification for example?     

The other option that has traditionally been used by government agencies but is starting to lose market share to Best Value is Lowest Price Technically Acceptable (LPTA). Using this vendor selection framework, the contract is awarded to the business offering the lowest price, point blank, with no consideration for any other subjective criteria. The thing to remember here is, not to price yourself out of the competition by thinking that you can justify your rate with the industry-leading quality of your goods or services. Instead of guessing, you can take advantage of tools like Spend Analytics to find out what the agency paid for its last contract, what other agencies are spending, and what your competitors have bid on past contracts. Having this knowledge will help you make the best decision for your company and make sure you are not taking a loss in order to land a contract at any cost.

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