GOVERNMENT CONTRACTING GUIDEPlan, prepare, and pursue

BEFORE YOU SPEND TO BID

Is this opportunity
worth pursuing?

A large contract can still be a poor business decision. Check whether you can qualify, what it will cost to compete, what you could keep if you win, and how you will fund the work.

One opportunity. One defined scope. Use USD estimates for the same period throughout. Enter 0 when a cost does not apply; an empty field stays unknown.

How your information is handled

Answers stay in this open page. This guide does not submit them to StreamWalkers, save them in your browser, verify your eligibility, or send a bid. Refreshing or closing the page clears your answers. Download a decision memo if you want a copy. Use a working opportunity name and avoid tax IDs, account numbers, or confidential proposal details.

Opportunity decision worksheet

FIT COMES FIRST

Check the non-negotiables.

Use the defensible revenue for the work you could receive if you win. An IDIQ ceiling, maximum contract value, or unexercised option is not assured revenue. Reassess later orders and options separately.

A “No” to a required condition blocks a Go. An “Unknown” means stop and gather evidence. A high profit estimate cannot override either.

Check the exact route, required registrations, set-aside or certification rules, licenses, and any contract vehicle access. A GSA Schedule does not unlock every opportunity.

Read the current notice and all amendments. Include mandatory site visits, submission instructions, required forms, delivery dates, and the stated time zone.

Confirm staffing, available time, qualified partners, capacity, security and other applicable requirements. Consider which other work this would displace.

Check scope, quantities, current supplier quotes, labor rates, pricing assumptions, risk allowances, and the evaluation method. An attractive ceiling is not a sales forecast.

Check the payment terms and the timing of payroll, purchases, and other outflows. Confirm access to allocated cash or committed financing; hoped-for borrowing is not committed funding.

What counts as evidence?

The actual solicitation and amendments; the rules for the award route; current registration or certification status where required; documented capacity; vendor quotes; a realistic price model; and payment and funding terms. “Yes” records your review. The calculator does not check these records for you.

THE COST OF COMPETING

Price the work before the work.

Enter the costs you still expect to incur to compete, whether you win or lose. Keep costs incurred only after award in the delivery section.

hours

Time still needed for research, teaming, quotes, writing, reviews, and submission. Include owner time.

USD / hour

An estimated cost per hour including pay and allocated employment costs. Use a weighted average for mixed roles; do not use your customer billing rate.

USD

Remaining consultant, proposal, legal, estimating, or other external review costs incurred in the pursuit.

USD

Remaining pre-award travel, required visits, samples, bid-related fees, and other pursuit costs. Count each amount once.

USD

History only: nonrecoverable time and money already committed to this opportunity. Shown in all-in profit; excluded from the forward decision.

Why count my time if I am not writing a check?

Owner and staff time has an economic cost and consumes capacity you could use elsewhere. Counting it makes the comparison more realistic. Do not also add the same time as an outside cost or in delivery labor.

Sunk cost means money or time already spent and not recoverable. It matters when looking back at total profitability, but spending more cannot undo it. This guide excludes it from forward expected value and break-even probability.

IF YOU WIN

Find the profit behind the price.

Estimate the cost of delivering this specific scope. These are economic planning figures before income tax; this worksheet does not certify accounting or tax treatment. Count each cost once and include the costs your business must actually bear.

USD

Defensible scoped revenue if awarded and performed, not the total vehicle ceiling, speculative options, or borrowed money.

USD

Labor to perform the evaluated scope, including applicable employment costs. Exclude proposal hours already entered above.

USD

Required supplies, equipment, licenses, freight, and related acquisition costs for this scope.

USD

Partner and subcontractor delivery costs supported by current quotes or documented estimates.

USD

Travel during delivery, insurance, bonds, allocated overhead, and other execution costs. Do not repeat overhead included in labor or other lines.

USD

A cost allowance for identified execution risks. Document what it covers; it is not a promise that overruns cannot occur.

USD

The cost of financing this work. Loan principal is funding to repay, not revenue or a second operating expense.

Revenue, profit, margin — what is the difference?

Revenue is the amount earned for the scoped work. Delivery profit is revenue minus the costs to perform it. All-in win profit also subtracts both future and already-spent pursuit costs. Margin divides that profit by revenue; it is different from markup on cost.

This business-cost worksheet does not determine which costs are allowable, allocable, billable, or reimbursable under a government contract. The solicitation, contract type, applicable rules, and your accounting treatment control those questions.

RISK, CASH, AND YOUR THRESHOLDS

Make the decision survivable.

%

Your evidence-based estimate, not a platform forecast. Consider buyer fit, competition, incumbent position, evaluation factors, and your past outcomes.

%

Your chosen margin if you win, after delivery and future pursuit costs. This is a business preference, not a government threshold. Already-spent costs are excluded from this forward target.

USD

Optional spending limit for the remaining bid effort. Blank means no limit supplied. Enter 0 only if no further pursuit spending is authorized.

USD

The maximum cumulative funding requirement from today through payment, including future pursuit and delivery, BEFORE applying available cash or financing. Build a timeline of outflows and expected receipts; do not subtract the funds entered next.

USD

Uncommitted cash and committed funding actually available to cover that peak, after other business commitments. Include only financing that is committed and usable when needed.

How do chance of winning and cash change the answer?

Forward expected value weights the delivery profit by your assumed chance of winning, then subtracts the remaining pursuit cost. It is a planning average across hypothetical wins and losses, not a promised profit on this bid.

If you lose, you can lose the full future pursuit spend. A profitable contract can also create a cash crisis when payroll or purchases fall due before the customer pays. Use a time-phased cash plan and review invoice acceptance, payment terms, delays, credit availability, and the work you would have to turn away.

This planning screen helps you prepare a decision; it does not award authority to bid, certify your business, or guarantee a contract.

YOUR OPPORTUNITY REVIEW

Decision and next actions

Complete the worksheet to see the financial breakdown, probability sensitivity, and next actions.

Understand the decision, not just the color.

Go to final review

All five conditions are marked Yes; inputs are complete; forward expected value is positive; future pursuit is covered if you win; the cash plan has no gap; and your entered targets are met. A responsible person must still approve the actual bid.

Hold

A fact is unknown, an entry is missing, expected value is zero, or a personal margin or pursuit-budget target needs review. Resolve the specific issue. Changing a number without evidence does not resolve the underlying risk.

No-Go on these assumptions

A required condition is not met, forward economics are negative, or committed funds do not cover the cash need. Correct the blocker and reassess, or preserve your time and money for a better opportunity.

Show the formulas and important assumptions
Future pursuit cost
(Remaining staff hours × loaded hourly cost) + outside proposal/review + other pursuit costs
Delivery profit
Scoped revenue − total delivery costs
Forward win profit
Delivery profit − future pursuit cost
All-in win profit
Forward win profit − pursuit costs already spent
Forward win margin
Forward win profit ÷ scoped revenue × 100; compared with your chosen target
All-in margin
All-in win profit ÷ scoped revenue × 100; shown for context, not used to decide whether to keep spending. Both margins are undefined when revenue is 0.
Forward expected value
(Assumed win probability ÷ 100 × delivery profit) − future pursuit cost
Break-even win probability
Future pursuit cost ÷ delivery profit × 100, only when delivery profit is positive. Above 100% means even a certain win does not recover future pursuit costs.
Cash gap
Peak cash needed − available cash and committed funding, with a minimum of 0

Financial totals and money-based comparisons are rounded to cents. The model assumes the entered pursuit spend is incurred to compete and the entered delivery profit is the outcome if you win and perform the evaluated scope. It does not forecast award probability, simulate partial awards or cost overruns, or discount future cash flows. Assess alternate scopes, delayed payment, delivery-cost overruns, and alternative uses of your team separately. Sensitivity changes only the win probability; the other assumptions remain fixed.

All-in profit and margin show the full project history. The recommendation uses forward profit and margin, which exclude already-spent costs. Recovering sunk cost is not a reason to keep spending, and sunk cost alone is not a reason to abandon a good forward opportunity.

For the full evidence review and official sources, see the Playbook’s bid/no-bid and pricing chapter.

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