The average federal contractor has a 30% win rate on competitive proposals. For every three proposals submitted, two result in nothing but sunk costs. Time, money, and opportunity cost that could have been invested elsewhere.
But here's what separates consistently successful contractors from the rest: they are more selective about which opportunities they pursue in the first place. It's not that they write better proposals (though they often do). It's that they say no more often.
The bid/no-bid decision is the single highest-leverage point in your entire capture process. Get it wrong, and you'll burn through resources chasing contracts you were never going to win. Get it right, and you'll focus your limited bandwidth on opportunities where you have a genuine competitive advantage.
This article presents a structured framework for making objective, data-driven bid/no-bid decisions. One that replaces gut instinct with repeatable methodology.
The True Cost of Pursuing the Wrong Opportunities
Before diving into the framework, let's establish why this decision matters so much.
Proposal development typically costs between 1-3% of the total contract value. For a $5 million contract, that's $50,000 to $150,000 in direct and indirect costs. Salaries for proposal managers, writers, and subject matter experts. Printing, travel, and administrative overhead.
But the direct cost understates the real impact.
Opportunity cost: Every hour your capture team spends on a low-probability bid is an hour not spent on customer relationships, market research, or high-probability pursuits. Small and mid-sized firms often have the same people doing business development, capture, and proposal work. When they're buried in a 200-page proposal for a contract they won't win, they're not building the pipeline for contracts they could win.
Team fatigue: Proposal work is demanding. When teams repeatedly invest significant effort only to lose, morale suffers. The best proposal professionals want to work on winnable deals. They can tell when leadership is throwing resources at low-probability pursuits.
Reputation risk: Submitting non-competitive proposals can actually harm your standing with contracting officers. Agencies remember vendors who consistently submit proposals that miss the mark. Over time, you become 'that company' rather than a serious contender.
The goal isn't to bid on fewer opportunities. It's to bid on better opportunities, and to recognize the difference before you've invested significant resources.
The Five-Factor Qualification Framework
Effective bid/no-bid decisions evaluate opportunities across five dimensions. Each factor can be scored on a simple 1-5 scale, with clear criteria for what constitutes each score.
| Factor | Weight | Description |
|---|---|---|
| Customer Relationship | 25% | Your existing relationship with the buying organization |
| Technical Fit | 25% | Alignment between your capabilities and requirements |
| Competitive Position | 20% | Your advantages relative to other bidders |
| Contract Economics | 15% | Financial viability and strategic value |
| Organizational Capacity | 15% | Available resources to pursue and perform |
Factor 1: Customer Relationship (Weight: 25%)
The single strongest predictor of proposal success is your existing relationship with the customer. Studies consistently show that incumbent win rates range from 60-90%, while win rates on new business development opportunities average 10-15% for most contractors.
This isn't just about knowing the contracting officer. It's about understanding the end users' actual pain points, having credibility with the technical evaluators, and being seen as a trusted partner rather than just another vendor.
| Score | Level | Description |
|---|---|---|
| 5 | Strong | Active, positive relationship. Customer stakeholders know your team by name. You've delivered successfully before, and they've expressed interest in working with you again. |
| 4 | Good | You've worked with this customer previously with good results, but not recently. Or you have strong relationships at the agency but not this specific office. |
| 3 | Moderate | You've met with the customer during market research. They know who you are, but you don't have a track record with them. |
| 2 | Weak | Minimal contact. Perhaps you attended an industry day or submitted a capability statement, but there's no real relationship. |
| 1 | None | No relationship. You're responding to a posted solicitation with no prior engagement. This is sometimes called 'bidding blind.' |
Red flag: If you're scoring a 1 or 2 on a recompete where there's an incumbent with a Score 5 relationship, you need an extremely compelling differentiator to justify pursuit.
Factor 2: Technical Fit (Weight: 25%)
Technical fit assesses how well your actual capabilities align with what the solicitation requires. This isn't about whether you could do the work with some creativity. It's about whether your existing capabilities are a natural match.
| Score | Level | Description |
|---|---|---|
| 5 | Excellent | The requirements describe exactly what you do. Your past performance directly demonstrates this capability. You have key personnel on staff who have done this specific work. |
| 4 | Strong | Strong alignment with minor gaps. You may need one or two additional hires or a subcontractor for specialized elements, but your core capability is solid. |
| 3 | Moderate | Moderate alignment. You have relevant experience, but this would stretch your team into adjacent areas. You'd need to rely significantly on subcontractors or partners. |
| 2 | Weak | Weak alignment. The work is in your general domain, but the specific requirements don't match your experience. You'd be learning on the customer's dime. |
| 1 | Poor | Poor fit. The requirements are outside your core competency. You're pursuing this because it's available, not because you're qualified. |
Red flag: If the solicitation requires specific certifications, clearances, or past performance that you don't have (and can't credibly obtain through teaming) this is likely a no-bid regardless of other factors.
Factor 3: Competitive Position (Weight: 20%)
Understanding your competitive position requires honest assessment of who else is likely to pursue this opportunity and how you compare.
| Score | Level | Description |
|---|---|---|
| 5 | Dominant | Significant competitive advantages that are difficult to replicate. You may be the only qualified vendor, or your technical approach is demonstrably superior. |
| 4 | Advantaged | Among the top competitors. You have differentiators, and you can articulate why you're the best choice. |
| 3 | Competitive | Competitive but not clearly advantaged. You're one of several qualified vendors who could do the work well. |
| 2 | Disadvantaged | At a disadvantage. Competitors have stronger relationships, better past performance, or lower price points. |
| 1 | Outmatched | Significantly outmatched. One or more competitors have overwhelming advantages in customer relationship, technical capability, or price. |
Key question: What is your specific, articulable differentiator? If you can't complete the sentence 'We will win this because _____' with something concrete, you're probably a Score 3 or below.
Factor 4: Contract Economics (Weight: 15%)
Contract economics evaluates whether the opportunity makes financial sense for your business. Not just in terms of revenue, but profitability and strategic value.
| Score | Level | Description |
|---|---|---|
| 5 | Excellent | Contract value justifies pursuit investment. Margins are healthy. Terms are favorable. Strategic value is high (opens new markets, builds key past performance, positions for larger follow-on work). |
| 4 | Good | Good economics with minor concerns. Value and margins are acceptable. Some terms may require negotiation, but overall it's a sound opportunity. |
| 3 | Marginal | Economics are marginal. The contract would be profitable, but barely. Or the value is good but terms are onerous. |
| 2 | Questionable | Questionable economics. Low margins, unfavorable terms, or contract value doesn't justify the pursuit investment. |
| 1 | Poor | Poor economics. This contract would strain resources, require capabilities you'd need to build, or lock you into unfavorable terms. |
Important calculation: Estimate your total pursuit cost (capture plus proposal) and divide by the probability of winning. If your pursuit cost is $75,000 and you estimate a 20% win probability, your expected pursuit cost per win is $375,000. Does that make sense for this contract?
Factor 5: Organizational Capacity (Weight: 15%)
This factor is often overlooked in bid/no-bid decisions, but it's critical. Can you actually pursue this opportunity well given everything else on your plate?
| Score | Level | Description |
|---|---|---|
| 5 | Available | Available capacity and the right team. Proposal resources are not overcommitted. Key personnel are available for proposal development and could transition to performance if you win. |
| 4 | Manageable | Capacity is manageable. Some juggling required, but you can staff this pursuit appropriately without sacrificing quality on other efforts. |
| 3 | Tight | Capacity is tight. You can pursue this, but it will stretch your team. Other pursuits or current performance may suffer. |
| 2 | Strained | Capacity is strained. Taking this on means pulling resources from other priorities. You'll be asking people to work nights and weekends. |
| 1 | None | No capacity. You're already overcommitted. This pursuit would require heroic effort that's not sustainable. |
Reality check: Many contractors systematically overcommit, believing that 'we'll figure it out.' The result is multiple mediocre proposals instead of one or two excellent ones. A great proposal on a winnable opportunity beats three rushed proposals on marginal opportunities every time.
Calculating Your Pursuit Score
Once you've scored each factor, calculate a weighted total using the weights provided above.
| Score Range | Recommendation | Action |
|---|---|---|
| 4.0 - 5.0 | Strong Pursuit | Commit resources and pursue aggressively. |
| 3.0 - 3.9 | Conditional Pursuit | Proceed if you can improve weak areas. Identify specific actions that would raise your score (establish customer contact, secure teaming partner, confirm key personnel availability). |
| 2.0 - 2.9 | Weak Pursuit | Generally a no-bid unless there's a compelling strategic reason. If you pursue, be honest about low probability and limit investment accordingly. |
| Below 2.0 | No-Bid | Don't pursue regardless of how attractive the contract looks on paper. |
Beyond the Score: Critical Questions to Ask
The framework provides structure, but experienced capture professionals also ask these qualitative questions:
'Why would the customer choose us?' If you can't answer this clearly and specifically, you're not ready to bid. 'We have good people' or 'we're committed to quality' aren't differentiators. Every competitor says the same thing.
'What would have to be true for us to win?' This reveals your underlying assumptions. If winning requires the incumbent to stumble, the evaluation to ignore past performance, or your price to be 30% below market, those are warning signs.
'What don't we know?' Be honest about information gaps. If you don't know who the incumbent is, what the budget is, or what problems the customer is actually trying to solve, you're operating blind.
'If we win, can we perform?' Pursuit decisions often focus entirely on winning, but you also need to deliver. If winning this contract would create staffing crises, require capabilities you don't have, or conflict with other commitments, factor that into your decision.
When to Walk Away
Some situations should trigger an automatic no-bid:
| Trigger | Explanation |
|---|---|
| Mandatory requirements not met | If the solicitation requires certifications, clearances, or specific past performance you don't have, and can't credibly obtain through teaming, don't bid. |
| Incumbent is wired | If the solicitation appears written around a specific competitor's capabilities, and you have no relationship with the customer, your probability of success is near zero. |
| LPTA procurement | Unless you're confident you can be the lowest-priced bidder, Lowest Price Technically Acceptable procurements are often no-bid situations for companies competing on value. |
| Already overcommitted | Submitting a mediocre proposal hurts your reputation more than not bidding at all. |
| Economics don't work | If you can't make money on this contract even if you win, why are you pursuing it? |
Building Qualification Into Your Process
The best contractors don't treat bid/no-bid as a one-time decision. They build qualification into every stage of their pipeline:
| Gate | Stage | Purpose |
|---|---|---|
| Gate 1 | Initial Screening | Apply quick filters. Does it match your NAICS codes? Is the contract value in your range? Is it in a geography or agency you serve? This eliminates obviously poor fits before you invest any analysis time. |
| Gate 2 | Preliminary Qualification | Gather enough information to complete the five-factor framework. This might require some customer outreach or competitive research. Make a preliminary bid/no-bid decision. |
| Gate 3 | Final Qualification | Before committing significant proposal resources, revisit your analysis. Has new information changed your assessment? Have competitors emerged that you didn't anticipate? Are your key personnel still available? |
| Continuous | Re-evaluation | Even during proposal development, stay alert to new information that might change your assessment. It's better to withdraw from a pursuit than to submit a proposal you know won't win. |
How Technology Can Help
Modern opportunity intelligence platforms can improve your qualification process by surfacing opportunities that match your profile, reducing time spent on initial screening. They provide fit scores based on your capabilities, past performance, and strategic priorities. They identify the competitive landscape through historical award data. They track customer buying patterns to inform relationship assessment. And they manage pipeline gates with structured qualification workflows.
The goal isn't to automate the bid/no-bid decision. Human judgment remains essential. But technology can ensure you're making decisions with complete information rather than gut instinct.
Conclusion
The bid/no-bid decision is where successful government contractors separate themselves from the pack. By applying a structured framework, you'll stop chasing marginal opportunities and start focusing your resources where they'll generate the highest return.
The framework presented here isn't just theory. It reflects how the most successful capture organizations actually operate. They're selective. They're disciplined. And they're honest with themselves about their competitive position.
The result? They may bid on fewer opportunities, but they win a much higher percentage of what they pursue. Their teams are energized rather than exhausted. Their reputation with customers grows. And their businesses thrive.
Start applying this framework to your next opportunity. You might be surprised how clarifying it is, and how much stronger your capture process becomes when you're pursuing the right opportunities instead of all opportunities.
Looking for a platform that helps you identify and qualify opportunities automatically? BidClever's TRS (Tender Relevancy Score) analyzes every opportunity against your company profile, including capabilities, certifications, past performance, and strategic priorities, so you can instantly see which contracts deserve your attention.