Does your bid price cover the work you promise?

Review basis

Compare the same offer on both sides

Place the near-final answer set beside the delivery plan and commercial files. Include commitments made in diagrams, implementation schedules, staffing tables and clarification responses. Write down the lot, bidder, service term, locations, base scope and separately requested options. If finance has priced a three-year service while the response describes a five-year operating plan, settle that difference before matching individual rows.

Keep three amounts visible: the bidder’s cost of delivery, the price charged to the customer and the amount calculated for evaluation. They may differ legitimately. An evaluation basket might use sample quantities; it does not necessarily promise that revenue. A cost model may include an approved allocation of overhead that does not appear separately in the buyer’s form. The review needs the relationship between the amounts, not forced equality.

The UK Sourcing Playbook links clear specifications with the ability to relate offered prices to delivery costs. Its sourcing guidance is aimed principally at UK public bodies. Here, that relationship informs a bidder-side review method; it does not establish the pricing rules for another country or for a private RFP. The issued documents remain the starting point.

Decide which findings must stop release before reviewing them. A missing mandatory activity, an unsupported customer dependency or a material unexplained cost gap needs an owner and a decision. Do not let a high percentage of matched rows hide one expensive omission. The person preparing the reconciliation should not quietly redefine materiality to make the package pass.

Scope mapping

Follow the promise through the work into the price

Use a row for a commitment that can be assessed as a coherent piece of work. Preserve its exact location and enough wording to recover its meaning. Then describe the activity, volume, delivery period and performing role. A promise of quarterly on-site reviews needs the number of sites, visits per site, preparation time, attendance and travel treatment. A row labelled account management cannot answer those questions by itself.

Connect that work to the internal estimate and then to a buyer price line or documented bundle. This can be many-to-one: several tasks can share one recurring fee. It can also be one-to-many: mobilisation may consume project management, technical setup and travel budgets. Use references that let a reviewer find the underlying quantities and rates rather than copying a total with no explanation.

The GAO Cost Estimating and Assessment Guide identifies the technical baseline, work breakdown and assumptions as parts of reliable estimating. It is a programme-cost guide, not a rule requiring bidders to reveal their margins. The practical application here is an internal connection between the offered work and its estimate. Keep confidential rates and supplier terms out of the customer package unless disclosure is required and authorized.

A useful row ends with a conclusion: covered by the referenced allowance, missing from the model, duplicated, conditional on a documented trigger, or unresolved. Avoid a single checked box that conflates finding a cost reference with confirming its adequacy. The delivery owner verifies the work estimate; the commercial owner verifies its treatment in the offer.

Mismatch tests

A matching label can conceal a different service

Compare dimensions before amounts. Training priced per session may not cover training promised to every employee. Support priced for office hours may not cover the weekend service described in a diagram. Ten licences can mean named users, concurrent users or administrators. Preserve the buyer’s units and the supplier’s cost units, then write the conversion explicitly. If the conversion depends on attendance or utilisation, record the evidence supporting that assumption.

Time introduces less visible gaps. A recurring cost may start at service commencement even though the promise starts during transition. An implementation team may be needed while the existing operation continues. A warranty or exit commitment can extend beyond the period used in the main revenue calculation. Check the first and last month, overlaps and one-off activities separately from a typical operating month.

Look at effort as well as money. A salaried specialist has a cost allocation and a finite calendar. Two work packages can each contain a plausible allocation but require the same person on the same day. A low marginal cash cost does not establish spare capacity. Ask the delivery owner to show the available time, replacement arrangements and any work displaced by this bid.

Test the reverse direction after reviewing promises. For each substantial allowance, find its current scope justification. An obsolete installation option might still consume cost; a subcontractor quote might already include travel that was added again centrally. Remove a duplicate only after proving the overlap in scope, period and inclusions. Similar labels alone do not demonstrate double counting.

Worked example

Unpriced visits consume more than half the planned margin

Northmere is a fictional service bid used only for this calculation. The candidate offers a fixed EUR 240,000 price against EUR 192,000 of estimated costs. For this example, margin means price less those modelled costs, divided by price; the initial margin is EUR 48,000, or 20%. All figures exclude tax and the same defined cost basis is used throughout. These are invented estimates, not market rates or a recommended margin.

The technical response adds twelve site visits, each requiring two specialist days at EUR 600 per day and EUR 350 travel per visit. It also promises an exit exercise estimated at EUR 6,400. The original estimate contains neither item. Their incremental cost is EUR 14,400 for specialist time, EUR 4,200 for travel and EUR 6,400 for exit work: EUR 25,000 in total.

At the unchanged price, costs become EUR 217,000 and the margin amount falls to EUR 23,000. The margin rate is approximately 9.58%. The spreadsheet may have calculated its original inputs perfectly. The defect was the service those inputs represented. The reviewer records the missing commitments and sends the revised economics to the commercial decision-maker.

If the team wanted to preserve a 20% margin on that same cost basis, the arithmetic price would be 217,000 ÷ 0.80 = EUR 271,250. Adding 20% to cost would instead be a markup calculation and would not preserve a 20% margin. Neither calculation permits a price change, proves competitiveness or justifies deleting the visits. The bidder still needs an authorized, tender-compliant decision.

Possible decisions include retaining the service at a consciously approved lower margin, revising the price where the procedure permits, or replacing discretionary wording with a narrower compliant offer before submission. If the visits are mandatory, removing them does not solve the bid. If their scope is ambiguous, the reviewer cannot close the gap by assuming that only one site needs a visit.

Commercial treatment

Explain included work without inventing a right to charge

A separate selling price is not required for every activity. A fixed fee can cover reporting, governance and routine support together. Internally, identify which allowance supports each activity and how shared costs are allocated. Do not add the whole shared pool to every row and then total those rows as if they were separate costs. Retain a distinct pool reference and reconcile its allocation to the original amount.

An inclusion can also be an intentional commercial investment. The bidder may choose to deliver an extra workshop without a separate charge. The workshop still consumes preparation and delivery time, so show its cost and the resulting economics. Describe the decision as a funded inclusion or approved margin sacrifice, not as zero effort. The person approving that sacrifice must have the relevant commercial authority.

Keep base work and optional work separate. If a base-service cost is recovered only when the customer buys an option, the base case has a dependency that needs explicit review. A requested option price does not guarantee purchase. Conversely, check whether an optional service carries minimum staffing or licence costs even when take-up is low. Follow the actual charging rules rather than inferring them from a worksheet tab name.

Customer responsibilities require the same discipline. A cost model might assume that the buyer cleans migration data, provides rooms or supplies first-line support. Locate that allocation in the tender or a permitted, properly treated qualification. An assumption written only in the bidder’s working file does not change the customer’s requested service. Where the documents conflict, obtain clarification or a reviewed offer treatment.

The UK risk-allocation guidance describes allowable assumptions as a formal mechanism in specified model contracts. That is different from an informal note reserving a future price increase. Whether a particular adjustment is available depends on the actual contract and procedure. Route contractual interpretation to the appropriate adviser; do not use this reconciliation table to invent a variation entitlement.

Decisions

Close each finding with changed evidence

Give a finding a specific description: response section 6 promises twelve visits; cost estimate version 8 contains remote reviews only; the estimated incremental cost is EUR 18,600 for visits and travel. Attach the relevant references and name who must decide. A comment such as commercial to check can survive several reviews without anyone resolving the offer.

Record the selected treatment, who authorized it and what changed. A cost correction needs revised inputs and totals. A scope correction needs exact replacement wording in every affected answer, plan and price note. A shared-cost explanation needs a reconciled allocation and confirmation of capacity. A buyer clarification needs the official answer and its application to this bid. Keep an unresolved item open when the supporting event has not happened.

Finance and delivery answer different questions. Finance can approve an economic position but cannot establish that two engineers can perform work needing four. Delivery can approve a method but cannot authorize an unapproved price reduction. When a decision affects both, obtain both reviews against the same documents. Add legal or procurement review where the treatment changes a qualification or depends on procedural interpretation.

Allow uncertainty to remain visible. An effort range may be more defensible than an invented point estimate. Show the cost range and identify the unresolved input, then ask for the appropriate risk decision. Do not turn a missing resource estimate into zero merely because the submission deadline is close.

Release review

Reopen the review when the offer changes

Tie the completed reconciliation to named response, plan, estimate and price-file versions. A later edit from monthly remote meetings to monthly on-site meetings changes the cost basis even if no numeral changes. Ask answer owners to flag changes to frequency, location, service hours, staffing, dependencies and inclusions after the joint review. Compare meaning as well as totals.

The AQuA Book distinguishes checking that analysis meets its specification from checking that it is fit for its intended use. Both matter here. Spreadsheet verification checks the calculations; the scope review tests whether the model represents the offered service. One does not replace the other. After correcting scope or cost, repeat the calculation checks affected by that change.

Before release, inspect the actual files to be submitted, including exported PDFs and entered portal values where applicable. Confirm that permitted price information appears only in the required places. Do not send the internal reconciliation, cost rates or margin analysis merely because it helped approve the bid. Prepare a customer-facing explanation only if requested, appropriate and authorized.

The handoff to the commercial approver should identify the reconciled scope, revised economics, decisions taken and any remaining limitation. Keep submission authorization separate. A completed reconciliation establishes what has been checked about the offer; it does not itself authorize a portal submission or determine which promises later become contractual obligations.