How a failed bid for a government contract can help your business

How a failed bid for a government contract can help your business

On Behalf of | Feb 9, 2021 | Business Law

Securing a government contract can be a difficult process. First of all, you have to find out about an upcoming project. Then, you have to explore what it would cost your company to provide the materials or services.

After that, you have to make a careful decision about what profit margin is acceptable. You obviously don’t want to take a loss on the project, but accepting a smaller profit margin for the guaranteed compensation that comes with a government contract can be a worthwhile sacrifice.

Unfortunately, even after you put in all of that work, it’s possible that you could find out that someone else got the project. That rejected bid could actually become something beneficial for your company because it can be a tool for learning and improvement.

You can take advantage of the transparency in the IFB process

There are multiple different ways that the government hires contractors for various projects. Some of these processes are sealed or more secretive than others. The Invitation for Bid (IFB) process is not secretive. The records of every bid will become part of a bid abstract. That bid abstract is available to anyone who requests it.

Often, the government agency that accepted the bids will provide the abstract to an unsuccessful bidder if they simply ask. Other times, you may need to submit a Freedom of Information Act (FOIA) request. It could be possible for you to use the FOIA request process to review bids on a project that you did not even participate in the bidding for.

How the bid abstract helps your company improve

The bid abstract is a record of all of the bids submitted for a project. Although the details of each individual bid may not make it into the bid abstract, the most crucial information will. The total cost, the company name and certain other factors, like the turnaround time for production, may also be in the bid abstract.

All of that information can help you size up the competition and explore what sets apart the successful bidder from everyone else. It can also help you determine if you’re even able to price your bid competitively. Learning from other projects and failed bids can help you more aggressively pursue a contract in the future.