I Hate to Bid

We got an invitation to bid on a project the other day. It is pretty much in our sweet spot, or at least what we perceive is our sweet spot. It is the size project and the type of project that we do very well at. The problem is that they want a lump sum bid. Not only do they want a lump sum bid, but there are a total of 8 bidders. What do we do?

Let it be said that this is a large client and a big player in our industry. We can't ignore them. We must be responsive. So like good little contractors we will sit down with the voluminous paper provided and sharpen our pencils.

But I need some emotional release. I just hate this bid crap, it can really get me going. Bidding engineering is bad enough, but getting bids from 8 engineering companies? I am the type of person that builds a 500 page novel out of a single incident. I infer an endless series of things about something like this. They come flooding into my mind in situations like this.

Let me tell you my story. It is a story about hopelessness. It is a story about there being no way to win here. This is a losing hand all the way around. What are our options?

First, we can decline to bid. After investing all that marketing and relationship building energy, we decline the opportunity to do business. Procurement people really don't like that. And in a company that bids 8 engineering companies on a routine project, procurement obviously carries a big stick.

Second, we bid but put in so much contingency that we're safe. We know we won't get it but at least we are responsive. Well we have just created an indelible impression in the clients mind that we are a "high priced" firm. You don't want that hanging on your head. In this business, it is easier to overcome a moral turpitude conviction than a reputation for being "high priced".

Third, we bid the specification as we think the client intended it. Always a dangerous option, we put together a bid that allows enough time and money to do the project with the inevitable delays, additions, changes and other cost/time disadvantages that we know will occur. Given 8 bidders, this is virtually guaranteed to be a waste of time for us unless we really miss something and make a bad mistake.

Fourth, we bid the specification as written. An even more dangerous option, we put together a bid that takes advantage of what is actually written and bring a lawyer's sensibility to it. We put a good strong contracts person on the project to enforce the contract. We may well win the bid, but almost certainly lose the client.

I think what bothers me most is what I see as a lack of respect. As professionals, respect is important to us. Obviously the options above are broadly drawn, but I think valid as to our options. As a professional, as an engineer, I think the third option the proper way to go. I have been around long enough to feel comfortable about that being the general feeling among practicing engineers.

But in the situation we are placed in, that is a foolish way to proceed. We are forced to act in a way that is against our professional judgement. But that is precisely what we offer to the world, our professional judgement.

As an engineering service company, we are totally dependent on our clients. Business is very Darwinian. We will become whatever the market requires us to be. Whenever we are placed in a bidding situation by our clients, I am reminded of that fact. And I admit to a great deal of discomfort with that unpleasant fact.