Short answer: decide first, price second. Longer answer: you can't decide well without a rough idea of the price, so the two are really one loop. The order you run it in matters, because it decides how many weeks you spend on bids that were never going to pay.

Why the decision comes first

Pricing a bid properly takes real work: understanding what the buyer will pay, what delivery will actually cost, and what the competition is likely to do. That's effort you shouldn't spend on every RFP that lands in your inbox.

So the first job is to screen. Some bids are out for reasons that have nothing to do with price: a mandatory requirement you can't meet, a spec written around someone else, a deadline your team can't deliver. Those are no-bids in minutes. If you want the questions we use for that first pass, our guide to the bid/no-bid decision goes through them.

Why you can't skip price

Here's the catch. Most bids that survive the first screen aren't obvious. They look winnable, and the contract looks attractive. Whether they're worth winning depends on what you'd actually keep, and that depends on the price.

Without a rough price, you're deciding on the headline contract value, which is the most common way firms end up winning work that loses money. A large contract at a thin margin can be worse than a small one at a healthy margin, and you only see that once price is in the room.

So before you commit, you need a rough range, not a final number: roughly what the buyer can pay, roughly what it costs you to deliver, and roughly what the competition may bid. It doesn't have to be precise. It has to be honest.

The order that works

  1. Screen out the clear no-bids. Requirements you can't meet, specs written for someone else, timelines you can't hit. Stop here if any apply.
  2. Get a rough price range. Enough to see whether a realistic winning price leaves you with something worth having.
  3. Make the call. Bid, bid with conditions, or no-bid. Write down why.
  4. Price it properly. Now the full work is justified. Set a lowest viable price before you write a word of the response. See how to price a government bid.
  5. Check once more before you submit. If the price that wins is lower than the price that pays, the answer has changed. It's still fine to walk away.

That last step is the one people skip. Pricing doesn't only follow the decision. It can overturn it.

A quick example

This one is invented, to show the shape. A company finds a service contract that fits what it does and looks like a good size. It passes the first screen. A rough look at price shows that bids on contracts like this tend to be decided mostly on price, and that the price needed to compete leaves almost nothing after delivery costs. They pass in a day, instead of finding out in the final week after weeks of writing.

Now flip it. A smaller contract, price weighted lightly, and a strong fit. The rough range shows a healthy margin even at a competitive price. That's a bid worth the full effort.

Same process, opposite answers, and neither one needed a finished proposal to find out.

Mistakes we see

  • Pricing in the last week. By then the hours are spent, so a bad number feels like something you have to live with.
  • Deciding on contract size alone. Big isn't the same as good.
  • Treating the decision as one-time. New information, such as an addendum or a changed deadline, can change the answer. Check again.
  • Pricing to win at any cost. A win at a price that doesn't work is a loss with a contract attached.

Where to go next

If you want the thinking behind all of this in one place, start with bid economics. If you have a live bid and aren't sure which side of the line it's on, book a free 20-minute Bid Health Check for an honest first read. You can see what to expect first.