zmVault/bid-process-strategy.md

id, aliases, tags, title

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

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.

See bad-bid-practice

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.