Pricing Strategy for Competitive Tenders
Build the price in layers
| Layer | Content |
|---|---|
| Cost | Materials, labour, engineering and overheads |
| Risk | Contingency for the risks you cannot transfer |
| Competitive position | What the market is likely to bear |
| Strategic value | Reference value, market entry or volume |
| Margin | What the business needs to accept the work |
Practical discipline
- Freeze scope before finalising price; scope creep during pricing destroys margin.
- Record the assumptions behind every discount.
- Never price on hope of a change order.
Pricing is a commercial decision. Keep the build-up documented for post-tender reviews.