---
title: Bid Process Strategy
tags:
  - destiny/fleeting
  - topic/estimating
  - topic/risk
  - type/philosophy
---
# Bid Process Strategy

## Scope

This note is intended to describe bid process strategy
especially in terms of

* [[auction-theory]],
    which specifically addresses the competitive bid format
    typical of construction project award, and
* [[actuarial-science]], ...

### Outside Factors Influencing Bid Price

#### Expected Competition $\downarrow$

Predictably, competition drives price down.

Bidders will accept a lower payout
for a greater chance of reward.

**Competition** drives down **Probability of award**

#### Backlog Deficit $\downarrow$

Bidders will accept a lower payout or even a loss
in order to retain employees.

**Backlog Deficit** drives up **Utility of award**

## Factors Brainstorm

This is a list of semi-independent factors
relevant to the contractors decision of if and how to bid.

### Key

* `> [!info]` --- **Fact:** an indisputable truth or term definition
* `> [!important]` --- **Logical Consequence**
* `> [!tip]` --- **Relationship**
* `> [!success]` --- **Desirable Outcome**
* `> [!failure]` --- **Undesirable Outcome**

> [!info]
> The exact cost of a construction project is **uncertain**
> until it is completed.

> [!info]
> Customers request bids as a

> [!tip]
> Spending _more_ time on estimates

> [!tip]
> Estimating _more_ projects leads to _more_ opportunities for award.
> Estimating _fewer_ projects leads to _fewer_ opportunities for award.
