69 lines
1.6 KiB
Markdown
69 lines
1.6 KiB
Markdown
---
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id: risk-oriented-estimating
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aliases: []
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title: Bid Process Strategy
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tags:
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- authorship/original
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- destiny/permanent
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- status/incomplete
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- topic/estimating
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- topic/risk
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- type/philosophy
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---
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# Bid Process Strategy
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## Scope
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This note is intended to describe bid process strategy
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especially in terms of [[auction-theory]],
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which specifically addresses the competitive bid format
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typical of construction project award,
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and [[actuarial-science]], ...
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See [[bad-bid-practice]]
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### Outside Factors Influencing Bid Price
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#### Expected Competition $\downarrow$
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Predictably, competition drives price down.
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Bidders will accept a lower payout
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for a greater chance of reward.
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**Competition** drives down **Probability of award**
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#### Backlog Deficit $\downarrow$
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Bidders will accept a lower payout or even a loss
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in order to retain employees.
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**Backlog Deficit** drives up **Utility of award**
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## Factors Brainstorm
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This is a list of semi-independent factors
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relevant to the contractors decision of if and how to bid.
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### Key
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* `> [!info]` --- **Fact:** an indisputable truth or term definition
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* `> [!important]` --- **Logical Consequence**
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* `> [!tip]` --- **Relationship**
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* `> [!success]` --- **Desirable Outcome**
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* `> [!failure]` --- **Undesirable Outcome**
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> [!info]
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> The exact cost of a construction project is **uncertain**
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> until it is completed.
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> [!info]
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> Customers request bids as a
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> [!tip]
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> Spending _more_ time on estimates
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> [!tip]
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> Estimating _more_ projects leads to _more_ opportunities for award.
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> Estimating _fewer_ projects leads to _fewer_ opportunities for award.
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