To tender or not to tender?

Tendering can be a powerful pathway to growth, offering your business access to government contracts, infrastructure projects, or major private sector deals. But not every opportunity is a good fit. In fact, chasing the wrong tenders can waste time, stretch resources thin, and lead to repeated rejection.

That’s why having a robust bid/no-bid decision-making process is critical. Before jumping headfirst into writing a response, smart businesses step back and ask: Is this opportunity truly worth it?

Here’s how to assess whether to tender or walk away - with confidence.

Understand the opportunity clearly

It all starts with clarity. Before you even consider writing a tender response, take the time to read the entire tender document thoroughly. Key areas to review include:

1. Scope of works or services
2. Mandatory requirements
3. Evaluation criteria
4. Key dates and timelines
5. Contract duration and value
6. Any terms and conditions or special clauses

Ask yourself: do we fully understand what’s being asked? If the opportunity feels vague or overly complex without clear deliverables, it may signal a poorly constructed tender, or one that’s not aligned with your capabilities.

Check for any mandatory criteria red flags

Mandatory criteria are non-negotiable. If your business cannot meet even one of these requirements, your bid will likely be disqualified before it’s even reviewed. Common mandatory requirements include:

1. Specific licences or accreditations (e.g. ISO certifications, security licences)
2. Minimum insurance levels
3. Industry memberships
4. Local presence requirements
5. Minimum experience thresholds

If you don’t tick every box in this section, it’s a no-bid. Even if you think your offering is stronger overall, tender evaluators are bound by rules and will often exclude non-compliant responses before looking at value.

Assess the strategic fit

Does this opportunity align with your business goals and core services? A tender that sits outside your current strategy may not be worth the diversion, even if it’s lucrative.

1. Does it help you grow in a target market or region?
2. Will it open doors to longer-term or repeat work?
3. Can you use this contract as a case study or stepping stone?
4. Does it align with your values and capabilities?

If the answer is yes, it may be worth pursuing, even if it’s a stretch. But if you’re chasing it just because it looks impressive, my advice is to think twice.

Evaluate your competitive position

Be honest: Can you win it? Understanding your competitive edge (or lack of it) is essential. Some areas to have a good, honest think about:

1. Do you have a relationship with the buyer or a history of similar work?
2. Are you a known provider in this space?
3. Do you have case studies or testimonials relevant to the opportunity?
4. Can you offer something your competitors can’t (e.g. faster delivery, better technology, local employment benefits)?

If you're entering a field with dominant incumbents and no real differentiator, it may not be the right time.

Consider your resource availability

Tendering takes time. A high-quality submission may take 20 to 100+ hours, depending on complexity. If you’re already stretched thin, can your team deliver a compliant, high-quality response without compromising day-to-day operations? Also consider:

1. Can you meet the delivery timeline if awarded?
2. Are the right staff available to work on both the bid and the contract?
3. Will this tender distract from other high-value activities?

If the answer is no, you risk submitting a rushed response or failing to deliver if successful.

Analyse the risk and profitability

Even if the tender looks appealing, is it financially viable? Dig into the numbers:

1. What will it cost you to deliver the service or product?
2. Are there liquidated damages or penalty clauses?
3. Is the payment schedule reasonable?
4. Is the pricing model sustainable?

Government contracts are often tightly priced. If you have to cut corners or accept slim margins just to compete, this may not be a good fit – and all you’re doing is encouraging a race to the (pricing) bottom.

Also assess reputational or legal risk. Some tenders include terms that heavily favour the buyer. Review these with legal or commercial advisors if needed.

Score the opportunity objectively

To avoid emotional decisions or internal bias, you use a bid/no-bid scoring matrix. This is a system that scores each tender opportunity based on criteria such as strategic alignment, past experience, the likelihood of winning, profit potential, resource availability and risk exposure.

Determine your own weightings and scores to identify a cut-off. For example, you may decide that any tender scoring below 70% is not worth pursuing. This structured approach removes gut feel and gives you a clearer picture.

Look beyond this one tender

Sometimes, walking away is the smart move, especially if you can use the time saved to:

1. Build stronger capability statements
2. Strengthen relationships with buyers
3. Prepare for the next, better-aligned opportunity
4. Conduct post-mortems on past losses
5. Improve internal processes or team skills

Tendering is a marathon, not a sprint. Success comes from choosing the right races to run, not trying to compete in every one.

Final thoughts

Saying “no” to a tender can feel counterintuitive, especially when opportunities are scarce. But every bid you don’t pursue gives you more time and energy to invest in the ones that truly matter.

A well-structured bid/no-bid process helps you focus on what you do best, improve your win rate, and position your business for sustainable growth.

So next time a tender drops into your inbox, stop and ask: Is this worth our time, or should we wait for a better fit?

In the meantime, happy tendering from the team at TenderWise.