How to price a public-sector bid

Why price decides winnable bids

Under the Procurement Act 2023, a contract goes to the most advantageous tender (MAT) - the tender that best satisfies the buyer's published award criteria, assessed against a stated methodology and the relative weighting of each criterion (s.19 of the Act). MAT replaced the old “most economically advantageous tender” (MEAT) test: dropping the word “economically” signals that price does not have to dominate. But it does not disappear - price, other costs and value for money remain a factor authorities have regard to when setting criteria (s.23), and on most contracts price still carries real, published weight. (As of 5 July 2026.)

Here is why that matters when you sit down to price. Say a buyer scores 60% quality, 40% price. Your quality answer is genuinely strong - but a rival prices 15% below you. On a common lowest-price-gets-full-marks model, that gap can hand them most of the price marks and pull ahead overall, even with a weaker method statement. You did not lose on quality. You lost because the price was set without working out what it would actually take to win. Price it too high and a competitor takes the marks; price it too low and you either lose money or trip an abnormally low tender check. The winnable number sits in between - and finding it is a discipline, not a guess.

Value for money is what the buyer is really scoring

A public buyer is not simply after the lowest price. They have to justify their spend as value for money - the right balance of price, quality, social value and whole-life cost - and defend that choice if it is challenged. So the price that wins is rarely the cheapest. It is the one the buyer can point to and say “this represents value”: credible against the scope, deliverable at that number, and backed by a clear case for what they get for it.

That means two jobs, not one. You need a price that is competitive against the field, and you need to make the value-for-money case in writing - spelling out why your number is the sensible choice, not just the number itself. Most bids do the first badly and skip the second entirely. It is the clearest gap between a bid that gets close and one that wins.

How BidSquirrel prices a bid with you

Most bid tools stop at “here is the tender”. We go to the part that decides it. From the scope in the notice and the ITT, BidSquirrel builds a costed breakdown, recommends a price band and writes the value-for-money case to sit alongside it - the pricing and VfM axis no affordable SME rival covers.

The rule we never break: the price is built from your costs and your margin - never a number invented for you. Every band starts from your own rates, or from clearly-labelled estimates you confirm and can change. We read recent comparable award values to sense-check the band, but they are context, not the price-setter - we present them as comparables, never a precise market rate, and we never hand you a single oracle figure to submit blind. The number stays yours to set and to stand behind.

It is the same principle as the rest of the product: we draft it with you, not for you. You own the number, the margin and the final words. For exactly where the tool helps and where you decide, see our coverage & methodology.

Go deeper on pricing

Four plain-English guides on getting the number right - the method, the rules and the judgement calls behind a winnable price.

For the wider picture on how SMEs actually fare when they bid, read the state of SME bidding.