There’s an old saying that preparedness ensures success and unpreparedness spells failure. Without prior planning and preparation, it is difficult for any activity to achieve the expected success, and the same is true for bidding activities.

In public bidding, procurement requirements are often vague, while technical requirements, field conditions and other market factors are largely unknown.

The goal of pre-planning in the bidding process, therefore, is to better understand the risks you would face and the implications for your business if your tender was accepted.  Bidding risks can also include uncertainties around project requirements, scope, budget, and timelines, as well as market competition and the bidder’s capabilities.

Bidders need to analyse and manage these risks to ensure that their bids are competitive and profitable, while minimising the potential for unforeseen challenges that could arise during the project delivery.

Risk management in bidding is sometimes confused with risk-taking, which focuses only on short-term wins.

Risk taking to ”win the bid” has its own price, which is often the hidden and unpredictable cost that may eventually cause budget or project overruns, and ultimately, project failure.

Failure to plan for risks could open the door to many issues during the delivery phase.  Understanding planned and unplanned risks, and having a process for managing them in the pre-bid phase can also unlock valuable insights that can be used not just for making a bid/no bid decisions, but this can be used to design solutions to meet unique customer requirements; or to articulate method statements that highlight your ability to manage and overcome challenges; as well as driving more effective contract negotiations.

Planning for project and client risks

Risk assessments are a major part of the bidding process, but this step is often rushed or overlooked in favour of the more exciting and visible aspects of bid project management.  A bidder’s openness to be open and honest about risks and how you plan to manage them shows a buyer that you’re a mature bidding organisation with a commitment to delivering better outcomes.  The first step in conducting a risk assessment is risk identification. Interviewing project stakeholders, reviewing documentation, analysing previous opportunities, and sharing lessons learned on previous projects are ways to secure buy-in early in the process.

Bringing your stakeholders together to brainstorm innovative ideas on how to manage these risks can make all the difference to a winning or losing bid. Examples of project and client risks include:

  • Competition: Bidding involves competing against other companies, which can lead to pricing wars and low profit margins, and the obvious loss of business.
  • Scope creep: Projects that expand beyond the original requirements can result in cost-blow out, delays and reduced quality. Scope creep is a risk if the project’s requirements are not clearly defined, or if the client’s needs change during the project.
  • Cost estimation: Accurately estimating the cost of a project is crucial for bidding, bit it can be challenging to be absolutely accurate. If the estimate is too high, there’s the risk of losing the bid. If the estimate is too low, the business may end up losing money on the project or risk leaving money on the table.
  • Resource availability: Bidding for a project may require a business to commit resources, such as key personnel and equipment, to the project. If these resources are not available when needed (especially if there’s project cross-over or delays on other projects), it can cause further delays and quality issues.
  • Contractual: Once a bid is accepted if the contract is not well-drafted it can lead to the deadly ‘’three D’s’’ – disputes, delays and debt.
  • Reputation: Winning a bid and delivering a project that fails to meet a client’s requirements can cause reputational damage. If the business has a history of delivering poor quality work or missing deliverables, it may struggle to win future bids.

Planning for unforeseen external risks

Another significant benefit of conducting risk assessments early on in the bid process is that it can identify potential roadblocks, such as regulatory requirements, environmental concerns, or labour shortages. Armed with this information, companies can develop contingency plans and mitigation strategies to reduce the likelihood of delays, cost overruns, and other project setbacks.

Examples of unforeseen external risks:

  • Cultural: Communication and collaboration between the buyer and supplier can impact on the success of a project or services contract. When barriers exist, this can lead to misunderstandings, delays and quality issues.
  • Legal and regulatory: Outsourcing involves transferring sensitive data or information to another company. This can raise legal and regulatory compliance concerns, such as data privacy laws, intellectual property rights, and export control regulations to name a few. Failure to comply with these regulations can result in fines, lawsuits, and reputational damage.
  • Contractor stability: Financial stability, expertise and ability to deliver on time and budget are key risks in the outsourcing of projects and services. If a contractor experiences financial difficulties, changes ownership, or fails to meet their obligations, it can cause delays, quality issues, and potentially, project failure.
  • Supply chain disruptions: Suppliers may rely on a complex supply chain of vendors, subcontractors and partners. Any disruption in the supply chain, such as a shortage of raw materials or delays in shipping, can impact the project’s timeline and budget.


Many bidders place too much focus on pricing or the value of their solution and miss the opportunity to identify risks that they know are important to the client. By incorporating risk assessments into the bidding process early, companies can deliver more accurate budget estimations and project delivery timelines, along with strategies to reduce risk that are operationally, politically or strategically important to the client.

With a process in place to identify and analyse risks, teams can submit bids that are more accurate and creative, and with a team that is more informed and confident. Importantly, by avoiding project failures and setbacks, companies can protect their reputation and maintain the trust of their customers and partners, which can lead to more business opportunities in the future.