In the Indian public procurement system, the L1 (Lowest-1) bidder almost always takes the prize. But entering a price war that destroys your margins is a recipe for disaster.
Reverse Engineering the Estimate
Buyers always have an internal estimated cost. Often, this is published in the tender. Your first step is to analyze this estimate. Is it based on old schedule of rates? Is it realistic for the current market?
The Dangers of Abnormally Low Bids (ALB)
Quoting a rock-bottom price might make you L1, but buyers are increasingly wary of Abnormally Low Bids. If your price is considered unviable, the buyer may ask for Additional Performance Security (APS) or even reject your bid entirely to prevent project failure.
Quality and Cost-Based Selection (QCBS)
Not all tenders are purely L1. Service and consulting tenders increasingly use QCBS, where your technical score carries weight (e.g., 70% Technical, 30% Financial). In QCBS, a high technical score allows you to win even if you aren't the absolute lowest bidder. Maximizing your technical presentation is crucial here.
BidSarathi's analytics tools help you study past tender data from specific departments, giving you the historical context you need to price your bids competitively without sacrificing profitability.
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