Financial Modelling

Financial Modelling 1024 1024 Verity Silvester

Contracts Advance : Financial Modelling & Product Pricing

Financial Modelling/Product Pricing is crucial to the success of a bid submission. In many cases, the Financial Modelling/Product Pricing is assessed equal to, or greater than, the quality of responses and therefore you should give equal attention to both.

Pre-bid engagement may likely help improve your understanding of the client’s financial expectations and should supplement a comprehensive review of the specification, as this will give clear insight into the pricing requirements. If there are any concerns always use the clarification process to resolve any doubts.

 Key points to consider

1.) Financial Modelling/Product Pricing should run in parallel to the production of the bid responses and be reviewed as early as possible within the bid process. This is important because time, energy, and money may have already been invested in responding to the quality element of bid, only to find out the bid is unable to be submitted due to the financial element.

2.) Never view the Financial Modelling/Product Pricing in isolation of the responses being produced as the decisions regarding this will influence how responses will need to be positioned, and the solutions provided. For example, acknowledging that the price may be higher than the competition early on will allow time and opportunity to craft quality responses which justify the higher price which turns an Achilles Heel into a strength of service.

3.) Clarification Questions (CQs):

                a) Ask CQs which will allow a better understanding of the client’s financial envelope expectations

               b) Financial Modelling/Product Pricing is critical on receipt of CQs. It is important to adjust the price (higher or lower if possible) according to the CQs. On receipt of the CQs,

it may be discovered that it is not possible to submit a competitive solution, and therefore it may be worth considering abandoning the bid to focus time on other opportunities.

Want to get started?

The CA team would be happy to support you in the Financial Modelling/Product Pricing of a bid. For more information contact a member of our team for an explorative chat!

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