Guide
What does it cost to win a public tender?
Winning a procurement costs more than writing a tender. A tender easily takes 20–40 working hours, and every contract you win has to carry the time spent on the tenders you lost along the way. Calculate it like this: cost per tender divided by the share of tenders you win.
What does a single tender cost?
As a rule it costs nothing to submit a tender. The cost is your own time, and it is bigger than it looks. A tender can easily take 20–40 hours, and considerably more in large or quality-heavy procurements.
| Task | What it includes |
|---|---|
| Reading the documents | Administrative provisions, specification, contract terms, questions and answers |
| Qualification | ESPD, certificates, financial information, references |
| Costing and price | Your own cost calculation, price schedule, check against earlier awards |
| Quality answers | Solution description, working method, staffing, examples |
| Review and submission | Check against every mandatory criterion, signatures, upload |
On top of the time come direct costs: help from a consultant or bid writer, credit reports, certificates, sometimes presentations or trial deliveries. And one cost that is rarely counted: the work that did not get done while the tender was being written.
How do I work out what a won contract costs?
A tender is an investment with a probability. If you win some of the tenders you submit, every won contract has to carry the cost of the lost ones. The formula is simple: cost per won contract = cost per tender divided by the share of tenders won.
| Wins 1 in 2 | Wins 1 in 4 | Wins 1 in 8 | |
|---|---|---|---|
| Hours per tender | 30 | 30 | 30 |
| Hours per won contract | 60 | 120 | 240 |
The figures in the table are made up to show how the calculation works. The point is that your win rate affects the cost as much as the hours do. Halving the time per tender and doubling the win rate have the same effect. The second is often easier, and it starts with not bidding on tenders you cannot win.
For reference: an advertised procurement received an average of 4.6 tenders in 2024 and the median was 3, according to the Swedish National Agency for Public Procurement (Upphandlingsmyndigheten). If every tender had the same chance, a tenderer would win roughly one time in four or five. In reality qualification, price and quality decide, so your own figures tell you more than the average.
Which tenders push the cost up most?
- Tenders rejected at qualification. All the time is lost, and you learn nothing about price or quality. See the guide on mandatory and qualification criteria.
- Tenders where the price was a guess. You lose on price without knowing whether you were close. See the guide on pricing a tender.
- Tenders with the wrong focus for the evaluation. Long quality text when only price counts, or a squeezed price when quality weighs most. See lowest price or best value.
- Tenders against a clear favourite. When the incumbent supplier has a head start that the tender documents reinforce.
How do I lower the cost per won contract?
Measure your win rate
Count tenders submitted and won over the past year. Without that figure none of this can be calculated.
Make a go/no-go decision before every tender
Fifteen minutes that weed out the tenders you cannot win. See the guide on go/no-go.
Reuse what you can
Certificates, reference descriptions, CVs and standard texts in a shared library lower the time per tender.
Learn from the losses
Request the award decision and the winning tender when you lose. See the guide on award decisions.
Compare the cost with what the contract brings in
A small contract with a low chance of winning can cost more to win than it brings in as contribution margin.
How do I fill this in with our own figures?
- Number of tenders we submitted in the past twelve months.
- Number of them we won.
- Approximate hours per tender.
- What an hour costs us, including overheads.
- Direct costs per tender: consultant, certificates, other.
- Cost per won contract according to the formula.
The last line is the interesting one. Compare it with what a typical contract brings in as contribution margin. If the cost of winning eats a large part of it, you have a selection problem, not a writing problem.
How does Procura help you choose?
Procura is a Swedish service that shows suppliers which public tenders they qualify for and, where the price has been published, what similar contracts were awarded for. It tackles the two most expensive kinds of lost tender: those rejected on the criteria for the company, and those where the price was a guess. You can try it on a single procurement in the free tender analysis.
Sources
- Upphandlingsmyndigheten, statistics on advertised procurements, in Swedish: number of tenders per procurement 2024
Frequently asked questions
How long does it take to write a tender?
It varies a lot with the size of the procurement and how much quality text is required. 20–40 hours is common for a smaller procurement, and large or quality-heavy ones can take considerably more.
Does it cost anything to submit a tender in a public procurement?
As a rule, no. The cost is your own time and any direct expenses such as certificates, credit reports or outside help.
How do you calculate your win rate?
Divide the number of tenders won by the number submitted over a period, for example a year. It is worth counting separately per type of assignment or per buyer, since the differences are often large.
Is it worth hiring a bid consultant?
It depends on the contract value and your chance of winning. A consultant can lower the time per tender, but include the fee in the formula and compare it with what the contract brings in.