---
id: risk-oriented-estimating
aliases: []
tags:
  - destiny/permanent
  - status/incomplete
  - topic/estimating
  - topic/risk
  - type/philosophy
  - authorship/original
title: Bid Process Strategy
---
# Bid Process Strategy

This note is intended to describe bid process strategy
especially in terms of [[strategy#Auction Theory]],
which specifically addresses the competitive bid format
typical of construction project award.

### 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**