Bid or no bid? A checklist for grid and substation contractors
A simple scoring method for deciding which power line, substation and cable tenders to pursue, with the questions to ask, the red flags that should stop a bid, and a worked example.
Bid teams often lose more on tenders they should never have entered than on tenders they lost narrowly. A good bid on a well-chosen tender beats five rushed bids. This checklist turns the bid or no-bid decision into a short, repeatable exercise that takes an hour, not a week.
When to decide
Decide twice. Make a first, quick decision within a few days of the notice, using the notice and a first look at the documents. Make a second, firm decision once you have read the technical requirements, asked your questions and received first supplier prices. Everything between the two decisions should be cheap; the expensive work of detailed pricing and design starts after the second.
Step 1: check the deal-breakers
If the answer to any of these is no, stop, unless a partner can fix it:
- Do we meet every selection criterion: turnover, references, certificates, key staff?
- Can we deliver the scope, alone or with partners we trust, in the required time?
- Can we provide the guarantees and insurance required?
- Do we accept the contract conditions, especially uncapped liability, penalty levels and payment terms?
- Is there enough time to prepare a compliant bid?
Step 2: score the opportunity
Score each criterion from 1 (poor) to 5 (excellent), multiply by the weight, and add up. For risk, 5 means low risk. Adjust the weights to your business, but keep them the same from one tender to the next, so that scores can be compared.
| Criterion | Weight | Questions to ask |
|---|---|---|
| Technical fit | 20% | Is this our core work, voltage level and technology? Have we done the same thing recently? |
| Customer relationship | 15% | Do we know the buyer? Have we worked for them? Did we see this coming, or is it a surprise? |
| Competitive position | 15% | Who else will bid? Does the incumbent have an advantage? How did we do in similar tenders? |
| Award criteria | 10% | Do the criteria reward our strengths, such as quality, delivery time or low losses, or only price? |
| Margin potential | 15% | Is the budget realistic? Can we price the risks and still be competitive? |
| Risk | 10% | Ground conditions, outages and access, permits, currency, metal prices, penalties, design responsibility. |
| Capacity | 10% | Will the people and equipment be free when the work starts? What else are we bidding for? |
| Strategic value | 5% | Does it open a new customer, region or framework agreement, or add an important reference? |
A total score out of 5 above about 3.5 is usually a clear bid, below about 2.5 a clear no-bid. In between, the decision depends on how busy you are and how much the bid will cost to prepare.
Step 3: estimate the cost of bidding
A turnkey substation bid can easily take several hundred hours of engineering, estimating and management time, plus costs for translations, guarantees and travel for a site visit. Write the estimate down. Multiply your honest chance of winning by the expected margin, and compare it with the bid cost. If the expected value is lower than the cost, you need a strategic reason to go ahead, and it should be written down too.
Red flags
- A specification that points to one competitor's product without "or equivalent". Ask a question; if it is not fixed, think twice.
- Very short deadlines for complex work, which can mean someone prepared earlier.
- Unlimited liability or penalties without a cap.
- Fixed prices over several years for copper- or steel-heavy supplies, with no price adjustment.
- Design risk without design information, for example no soil data for foundations.
- Long equipment lead times that don't fit the programme, especially for power transformers and high-voltage switchgear.
- A buyer with a history of cancelling tenders or re-tendering after the bids are opened.
A worked example
A regional distribution operator tenders the construction of two 110/20 kV substations, with the operator supplying the transformers. The deal-breaker check finds one gap: the contractor's substation references are at 66 kV, and the documents ask for 110 kV. The team asks a clarification question; the answer confirms that 66 kV references don't count, so it brings in a partner with the right reference before going further.
With the partner on board, the team scores the tender: technical fit 4, customer relationship 4, competitive position 3, award criteria 4 (30% quality, with points for the site safety plan), margin potential 3, risk 4, capacity 4 and strategic value 4. Weighted, that gives exactly 3.70: a bid.
Keep a record
Log every decision, the score, and later the result, including the winner and the winning price from the award notice. After a year you will see which scores predicted wins, where your weights were wrong, and which buyers and tender types are worth your time. A pipeline tool helps: in TenderGrid you can move each tender through the stages of your pipeline and record why you bid, won or lost.