Bid Financial Modelling and Tender Pricing

Price to win, and still make a profit on the contract.

Our bid financial modelling service builds the cost model and bid pricing strategy behind your bid, so your price scores well and the contract stays profitable. We support UK SMEs and established suppliers bidding for public and private sector work. For Unsung Ltd, we built every financial model, including cost build-ups, pricing structures and sensitivity analysis, for a £2m Ministry of Defence contract they won. Book a consultation to talk through the pricing on your next bid.

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What is bid financial modelling?

Bid financial modelling means building an accurate financial picture of a bid or tender. It helps you reach a price that is competitive and still profitable, and that fits both your business objectives and the buyer's expectations. A structured bid process, with a sound model at its centre, makes you more likely to win contracts and helps you manage your resources well.

How buyers evaluate price

Buyers rarely score on price alone. Under the Public Contracts Regulations 2015, contracts are awarded on the most economically advantageous tender (MEAT), which weighs price against the quality of the proposal. Under the Procurement Act 2023, which applies to procurements started from 24 February 2025, the test is the most advantageous tender (MAT). Both approaches make sure price is not the only factor, although it is still a major one.

Price is often split into sub-weightings, such as the price for implementation, support, design and other parts of the project. If you understand these sub-weightings, you can align your bid with the evaluation criteria and position it against competitors. The result is a well-rounded proposal that meets the buyer's needs and stands out at evaluation.

The right financial model is what lets you choose the right pricing strategy, including value-based pricing where the tender allows it. It also lets you adjust quickly to the criteria of each tender, so your proposal stays flexible and competitive.

What's included in our bid financial modelling service

You can use the full service or pick the elements you need.

Comprehensive strategy formulation

From cost estimation to market pricing analysis, we design, develop and put in place a pricing strategy built for the specific opportunity.

Transparent financial inputs

We make sure your financial inputs are detailed and itemised, and that they match what you are offering and what the contract will oblige you to do.

Cost and pricing model development

We build complete cost and pricing models for your bid. We can also build a standard model that your team can adapt to any future bid format.

Rigorous reviews

We review your existing estimates, pricing model and supplier quotes in depth, to check they are accurate and competitive. We also check that your technical and pricing assumptions line up, so the price reflects the solution you are proposing.

Supplier pricing evaluation and procurement support

We evaluate the prices your suppliers and subcontractors have quoted and support you in procuring them, so third-party costs in your bid are realistic and agreed.

Mitigating commercial risks

We identify potential pitfalls, put a cost on them and give you practical ways to reduce the risk. Our risk analysis is designed to protect both your position and your profit.

Cost actuals versus pricing model

We compare your actual costs with the pricing model, so you have clarity on the contract and can check that the assumptions made at bid stage hold up in delivery.

Empowering your team

Beyond building models, we pass on our knowledge so your team understands bid financials and keeps improving. This matters most when your team lacks enough internal data to set a price point and needs to evaluate competitors' pricing structures and offers instead.

Flexible consultancy

We work remotely or on site, and fit around the way your business already runs.

Not sure your pricing is right? Book a consultation and we will review it with you.

How we work

Our bid financial modelling process follows five steps. Each step has a clear output.

1. Understand how price will be scored. We analyse the buyer's evaluation method, price weighting and sub-weightings. Output: a summary of how your price will be scored.
2. Build the cost baseline. We build a detailed cost model from a work breakdown structure, covering direct costs, indirect costs, risk contingency and margin. Output: cost model.
3. Model pricing scenarios. We assess the competitive landscape and model different pricing scenarios to find the right balance between competitiveness and profit. Output: recommended pricing strategy.
4. Test risk and sensitivity. We cost the risks, check compliance costs, transition and exit costs, and run sensitivity analysis on the key assumptions. Output: risk register and sensitivity analysis.
5. Finalise and hand over. We complete the buyer's pricing schedule, review it for accuracy and walk your team through the model. Output: submission-ready financial response and a model your team can use again.

Top 5 tips for financial modelling in the bidding process

Financial modelling makes sure your bids are competitive and profitable. These five tips will improve the financial models behind your bids.

1. Standardise your financial model. Have one standard internal financial model that you can adapt to any bid format. This gives you the flexibility to meet different tender requirements and keeps your bids consistent.
2. Keep it simple. Make your financial model simple, but able to support detailed analysis in different ways. A simple model is easier to adjust and easier to explain to the key people involved in the bid.
3. Use a work breakdown structure (WBS). We recommend setting your WBS out across four simple sheets: labour days, labour costs, labour price and non-labour. Each sheet should follow the same format and link to the others. Labour cost is days multiplied by the labour cost rate. Labour price is days multiplied by the labour price rate. Extra columns let you map WBS lines to the customer's own criteria, so you can adapt to any customer format.
4. Use summary and input sheets. Have a summary sheet and an input sheet where you can adjust rates, risk levels and escalation. This gives you a full overview and lets you make quick changes for each bid.
5. Build in flexibility for customer criteria. Design your model so it can handle customer-specific criteria. This lets you tailor the bid to the buyer's needs and makes your proposal more competitive.

Follow these tips and you will have a robust financial model that supports your bidding strategy and improves your chances of winning.

Understanding the bidding process: key stages

The bidding process is a structured sequence of steps you must work through to win a contract. It usually starts when the buyer issues a Request for Proposal (RFP) or Invitation to Tender (ITT). These documents set out the project's requirements, including the scope of work, timelines and evaluation criteria.

Read the RFP or ITT carefully to make sure you fully understand the requirements and can meet the qualification criteria. This first step sets the foundation for a successful bid.

Once bids are submitted, the buyer evaluates them. This covers the technical and financial merits of each proposal, often through a panel of evaluators, to keep the process fair and transparent. Several bidders will usually compete for the same contract, so you need to stand out.

A well-structured process helps the buyer choose the best bidder and deliver the project successfully. On your side, using data from past bids and past wins gives you insight that improves your chances. The final decision depends on several factors, including price, technical expertise and reputation.

If you understand how the process works, you can write bids that meet the buyer's needs and stand out from the field.

Your profitability is our priority

Getting the numbers right is one of the hardest parts of any bid. Accurate pricing wins the deal and also keeps the contract sustainable and profitable.

Our bid financial modelling service looks closely at how your business works, so every bid you submit is backed by a robust financial model. From understanding your cost baseline to developing market-aligned pricing, we support you at every step. With over a decade of experience, we guide businesses through every phase of the bidding process and help them submit tailored, compliant and competitive proposals.

Bid pricing strategies

Develop competitive pricing that fits your financial goals and market conditions.

Your pricing strategy can make or break a bid. There are several pricing models to choose from, each with its own advantages and trade-offs.

• Cost-based pricing: you calculate the cost of delivering the project and add a mark-up. This makes sure all costs, including labour, materials and overheads, are covered, and gives a clear path to profit.
• Value-based pricing: you price on the value the project brings to the buyer. This needs a deep understanding of the buyer's needs and the specific benefits of your service or product. Linking price to value can justify a higher price and set you apart from competitors.
• Competitive pricing: you set the price based on market conditions and what other bidders are likely to charge. This needs good market research and an understanding of the competition. The aim is to position your bid well against competitors while still making a profit.

A good pricing strategy considers the cost of delivery, market conditions and the buyer's budget. The type of project, the level of competition and the buyer's specific requirements will all shape the pricing structure. The goal is a balance: attractive to the buyer, and still economically viable for you.

Common pricing mistakes in bids

Through our work on hundreds of bid submissions, we have seen the same pricing mistakes recur across organisations and sectors. Knowing them helps you avoid them in your next submission.

Using a flat overhead and margin on every bid

One of the most frequent errors is applying the same overhead and margin percentage to every bid, whatever the contract. A five-year managed service contract has a very different risk and cost profile from a six-week consultancy engagement. Applying the same percentage to both means you either under-price the complex work or over-price the simple work. Your model should let you adjust overheads and margin for each opportunity.

Not pricing the cost of compliance

Many bids require specific certifications, security clearances, insurance levels or reporting that carry real costs. If you do not price these explicitly, they erode your margin during delivery.

Under-pricing transition and exit

Transition and exit costs are often under-priced or left out. This is especially common in managed service bids, where mobilising and demobilising can take significant effort.

Pricing to win rather than pricing to deliver

This is the most dangerous mistake. An unsustainably low price may win the contract, but it puts financial pressure on delivery. That usually leads to compromised quality, scope disputes or contract failure. We help you find the right balance between competitiveness and sustainability. For a full guide, read our article on financial modelling for bids.

Proof: results from our bid financial modelling work

£2m Ministry of Defence cyber security contract for Unsung Ltd

Unsung Ltd needed experienced commercial support to win a cyber security contract with the UK Ministry of Defence. We led the bid team and developed all the financial models, covering cost build-ups, pricing structures and sensitivity analysis. We also negotiated the third-party technology agreements and the contract with the MoD. - Result: £2m contract awarded. - Read the £2m Unsung Ltd case study

£5m Ministry of Defence contract secured for a cyber security client

A cyber security provider was bidding for a £5m MoD contract against established defence suppliers. As well as leading the bid, we ran a simulated financial scoring exercise to estimate competitors' pricing positions. We then calibrated our client's price against the tender's evaluation method, balancing competitiveness with margin protection. - Result: contract won, with an overall quality score of 90/100. - Read the £5m MoD case study

More financial modelling results

• £3m defence cyber security contract secured for Unsung Ltd, where we built and validated all financial models, including cost estimates, pricing strategies and margin analysis.
• £1bn in bids delivered for SDH Project Services, including estimating, financial modelling and pricing strategies across 16 bids.
• £20m incentivisation model designed for Villicare, with financial models built to support profit-sharing with the end customer.

Our own framework credentials

We bid for public sector work ourselves, so we know the process from the inside. - G-Cloud 14 – Athena secures a place on G-Cloud 14 - DOS 7 (Digital Outcomes and Specialists), Lots 1 and 3 – Athena awarded a place on DOS 7

Sectors we support

Defence

Defence bids often carry security, compliance and long-term delivery costs that must be priced from the start. We have built the financial models for MoD and defence prime contracts worth £2m, £3m and £5m. Our team holds Security Check (SC) clearance.

NHS and health

NHS buyers expect clear, compliant pricing that shows value for public money. We help health suppliers cost data protection, quality management and accreditation requirements so they do not erode margin during delivery.

Construction

Construction pricing depends on accurate estimating and a clear view of risk. We help contractors build cost models, price risk and test sensitivity before they commit to a price. Read about contract price types.

Technology

IT and cyber security bids often include third-party licences, hardware and managed services. We evaluate supplier pricing and build models that handle transition, support and exit costs. We hold places on G-Cloud 14 and DOS 7 ourselves.

Our services at a glance

• Development of complete cost and pricing models.
• Review and alignment of technical and pricing assumptions.
• In-depth supplier pricing evaluations and procurement support.
• Comparison of cost actuals against pricing models for contractual clarity.
• Risk analysis and solutions designed to protect your position and your profit.