What internal hourly rate should I use?

Use the fully loaded cost of the people writing the bid, including employer costs, not their gross salary rate.

Should I count director time?

Yes. Director time is the most expensive input in most small firm bids and ignoring it hides the real cost.

How do I estimate win probability?

Use the tender win probability calculator, then reduce it if you have not bid to that buyer before.

Free tender toolkit

Tender ROI Calculator

Bidding costs real money in staff time even when you lose. This calculator compares what the bid will cost you with the profit on offer, adjusted for how likely you are to win, so you can decide before you start rather than halfway through.

Hours spent bidding

Internal hourly cost

Direct bid costs

Profit if you win the contract

Win probability

Cost to bid: £2,700
Expected profit: £7,500
Return on bid spend: 177.8%

Estimate only, not financial or regulatory advice. This is an estimate only, provided for general guidance. It is not tax, accounting, financial or legal advice. Check any figures with a qualified professional before relying on them.

How it works

Bid cost combines the hours spent writing and pricing at your internal rate, plus any direct costs such as sample documents or accreditation.
Expected profit is the contract profit multiplied by your win probability.
Return on investment is expected profit minus bid cost, divided by bid cost, expressed as a percentage.
A negative figure means the average outcome across many similar bids loses money.

Worked UK example

A bid takes 60 hours at an internal rate of 40 an hour, with 300 of direct costs. The contract would deliver 30,000 of profit and the win chance is judged at 25%.

Bid cost: 60 x 40 + 300 = 2,700.
Expected profit: 30,000 x 0.25 = 7,500.
Net return: 7,500 - 2,700 = 4,800.

An ROI of about 178%, so the bid is worth writing on these assumptions.

Understanding your result

The number is only as good as the win probability you feed it, so be pessimistic. A useful discipline is to run the same calculation at half your assumed win rate. If it still clears zero, the opportunity is robust. If it only works at an optimistic win rate, either improve the bid position first or spend the time on a better fitting notice.

Frequently asked questions

What internal hourly rate should I use?: Use the fully loaded cost of the people writing the bid, including employer costs, not their gross salary rate.
Should I count director time?: Yes. Director time is the most expensive input in most small firm bids and ignoring it hides the real cost.
How do I estimate win probability?: Use the tender win probability calculator, then reduce it if you have not bid to that buyer before.

Related calculators

Bid cost calculatorHours by rate plus overheads and direct costs give the true cost of writing a bid.Open Tender win probability calculatorScore fit, experience, price position and incumbency to get a rough win likelihood.Open Public contract profit calculatorContract value less delivery costs and overhead gives profit and net margin.Open

Spend your bid budget where it counts

A Bid Pack turns the opportunity you have chosen into a structured first draft, so the hours you costed above go further.

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