How to read a government solicitation and decide whether to bid

First, know what kind of document it is

• Invitation for Bid (IFB): a sealed bid. The award normally goes to the lowest price from a bidder whose bid meets every requirement and who is able to perform.
• Request for Quote (RFQ): a request for a price on a defined need, common for smaller purchases.
• Request for Proposal (RFP): price is only one factor. The buyer scores your approach, experience and price against stated criteria.
• Sources sought or request for information: the buyer is researching the market. It is not an invitation to bid.

The type tells you how to compete. On an IFB you cannot talk your way past a higher price. On an RFP, a clear and well-organized response can beat a lower price.

The 30-minute first pass

Before you spend days on a response, read these parts in this order:

1. Key dates. The deadline for questions, any pre-bid meeting, the due date, the due time and the time zone. Put them in your calendar before you read anything else.
2. Scope and specifications. Exactly what is to be delivered, how much, where and how often. Look for brand names, certifications and quantities that are estimates only.
3. Instructions to bidders. How and where to submit, how many copies, what format, and which forms must be signed.
4. Evaluation criteria. How the buyer will choose. This tells you where to put your effort.
5. Terms and conditions. Payment terms, insurance, bonds, penalties for late delivery, length of the contract and renewal options.
6. The price sheet. Its layout, units and any lines you must fill in exactly as written.

Red flags that deserve a closer look

• Payment terms of 60 days or more when your suppliers want to be paid sooner. Can your cash flow carry it?
• Liquidated damages (a fixed charge per day of delay) that could wipe out your margin if one delivery slips.
• Bid or performance bonds or high insurance limits you do not yet have.
• Specifications written around one brand, which can mean a favored incumbent.
• Unclear quantities, where you may be asked to hold a price on volumes you cannot estimate.
• Long contract terms with fixed pricing, where your costs may rise but your price cannot.

A simple bid or no-bid scorecard

Score each line from 1 (weak) to 5 (strong). If anything critical scores a 1, do not bid until you can fix it.

Saying no is a skill. Every bid you skip is time you can put into one you can win.

Ask questions in writing, and ask early

If something is unclear, ask before the question deadline, through the channel the solicitation names. The answer is usually shared with every bidder as an addendum, so it puts everyone on the same page. Never rely on a phone call. If it is not in writing, it is not part of the solicitation.

Why bids are rejected

Most losing bids are not beaten on price. They are thrown out for reasons that are easy to avoid:

• A required form is missing, unsigned or incomplete.
• The bid arrives late, even by a minute.
• The response does not meet a stated requirement, or the bidder changed the price sheet.
• An addendum was issued and the bidder did not acknowledge it.
• The bidder was not registered, or not in good standing, when the bid was due.

Build a compliance checklist from the instructions to bidders, tick every line, and have a second person review the package. Then submit early and confirm that it was received.