How to price a government bid

Price to the award method

On a low bid procurement there is no credit for a better approach. Price is the whole competition, so your effort belongs in accurate quantities, tight subcontractor coverage, and a disciplined contingency rather than in narrative.

On a best value procurement price is typically worth twenty to forty percent of the total points, and the scoring formula is usually published. Run the math before you decide to sharpen the number: when technical and past performance carry sixty points, buying the last few price points by cutting staffing often costs more in technical score than it gains.

Fill the pricing form exactly as given

Agencies compare bids mechanically, so the form is not a suggestion. Use their line items, their units, and their quantities. Do not add lines, do not combine lines, do not attach your own spreadsheet in place of theirs, and do not leave a line blank when the instruction requires a figure or the word 'no charge'.

• Lump sum — one price for a defined scope; risk sits with you on quantity.
• Unit price — a price per unit against estimated quantities, paid on measured actuals.
• Time and materials or rate card — labor categories with hourly rates, common in services and IT.
• Alternates and options — priced separately and often used to fit the award to budget.
• Allowances — agency-specified amounts you must carry unchanged.

Unit pricing and the unbalancing trap

On a unit price schedule the agency multiplies your rates by its estimated quantities to rank bids, then pays on actual measured quantities. That gap invites front-loading — pricing early mobilization items high and later items low to improve cash flow, or overpricing items you expect to overrun.

Agencies watch for it. A materially unbalanced bid can be rejected as non-responsive, and evaluators routinely compare line items against the engineer's estimate and against the rest of the field. Price each unit to its real cost plus markup, and take your risk position in contingency rather than in the distribution.

Build the cost stack for public work

Public contracts carry costs a private job does not, and they belong in the number rather than in hope.

• Prevailing wage rates and the burden that scales with them, where the project is covered.
• Bond premium and any specialty insurance or endorsement the contract requires.
• Retention — often five to ten percent held until closeout — and the carrying cost of slow payment.
• Compliance labor: certified payroll, participation reporting, submittals, and closeout documentation.
• Escalation across a multi-year term, priced only in the way the contract permits.
• Liquidated damages exposure against a schedule you can actually meet.

The mistakes that disqualify

Responsiveness failures are unforgiving because the agency usually has no discretion to fix them. An unsigned bid form, a missing bid bond, an unacknowledged addendum that changed quantities, an omitted alternate, a math error between unit and extended price, or a submission that arrives one minute late all end the pursuit regardless of the number.

Build a submission checklist from the instructions themselves, have someone who did not price the job verify it, and file well before the deadline. On a sealed bid the price is public within the hour, so there is no advantage in being last.