The average winning bid costs contractors £60,208, with bid costs across winners and losers averaging 0.57% of project value. These figures are a starting point only: the number that should drive your budgeting decisions is cost-per-win, which accounts for every losing bid behind each contract you secure. The sections below explain why, and how to calculate your own figure.
TL;DR:
- Track staff hours before, during, and after submission alongside external fees and overhead, because unlogged senior staff time can understate each bid’s true cost.
- Divide annual bid spend by wins; if spending stays flat, raising the win rate from 20% to 30% cuts cost per win by roughly one third.
- Outsource high value, infrequent bids when internal expertise is limited; consultant day rates can make frequent, lower value tenders uneconomic.
- Reject poorly matched tenders before drafting, then reuse validated evidence to reduce avoidable staff hours and late rewrites.
- Treat the published construction benchmark as a sanity check, since sector, contract size, and procurement route can change preparation costs.
Table of Contents
- What goes into tendering costs
- Benchmarks and published figures you can use
- Outsourcing: what bid writers and consultants charge
- The true cost of losing bids and opportunity cost
- How to calculate your own bid cost and cost-per-win
- How to reduce your cost-per-win: practical measures and how technology helps
- Using these figures in your own planning
- An evidence-driven workspace to reduce effort and raise win rates
- FAQ
- Sources
What goes into tendering costs
Tendering costs fall into three phases, and most suppliers only capture the middle one properly. Pre-tender costs include market research, relationship-building and the time spent monitoring portals such as Find a Tender for relevant notices. Tender-phase costs cover the actual response: writing, reviewing, pricing, and compiling supporting evidence. Post-tender costs include clarification responses, presentations, and contract negotiation if you are shortlisted.
The biggest capture failure is internal time. Senior staff often spend days on a response without anyone logging their hours against the bid, which understates true cost and distorts decisions about which opportunities are worth pursuing. A simple fix is to apply graded hourly rates (bid manager, technical lead, finance) to timesheet entries, then add a reasonable overhead apportionment.
External costs typically appear once you commit to a serious pursuit:
- Bid-writing or consultancy support, charged by day rate, fixed fee or win fee.
- Design and production costs for printed or branded submission documents.
- Legal review for contract terms, insurance schedules or warranty clauses.
- Travel and subsistence for site visits, clarification meetings or presentations.
- Accreditation or certification costs needed to meet eligibility criteria.
Pro Tip: Log bid hours against a dedicated cost code from day one, even on opportunities you expect to drop, so your historic cost-per-bid figures reflect reality rather than guesswork.
Benchmarks and published figures you can use
The most cited UK benchmark comes from research led by Professor Will Hughes at the University of Reading, which found that the average cost of a winning bid for contractors was £60,208, against £23,821 for consultants. Some contractors in the sample reported very high tendering costs reaching a significant proportion of their operational turnover in a given year.
Winning bid cost versus project value tends to shrink as contract size grows, because fixed preparation costs spread across a larger award. A rough illustration:
- A £500,000 contract at 0.57% implies roughly £2,850 in bid cost.
- A £5 million contract at the same rate implies roughly £28,500.
- A £50 million contract implies roughly £285,000, though large bids usually carry proportionally lower percentages due to economies of scale in bid teams.
These figures are useful sanity checks, not fixed rules. The Reading study drew on a construction industry sample, so percentages will differ for professional services, IT, or facilities management tenders, and procurement route (open, restricted, framework) changes the preparation burden considerably.
Outsourcing: what bid writers and consultants charge
Bringing in external support is common once bid volume outstrips internal capacity, and pricing generally follows one of three models. Day rates for freelance bid writers or small consultancies often sit in the region of £450 to £750, with higher rates for specialists in technical sectors or complex frameworks. Fixed-fee arrangements suit well-defined, single-stage tenders where scope is unlikely to shift. Win-fee or success-fee components, sometimes layered on top of a reduced day rate, align the consultant's incentive with the outcome but are less common for smaller contracts.
What you get for your money varies:
- Entry-level support typically covers proofreading, formatting and compliance checking against the tender documents.
- Mid-tier support includes answer drafting from a brief, question-by-question scoring alignment, and a review cycle.
- Senior consultancy support includes bid strategy, win themes, client relationship input and presentation coaching.
Outsourcing tends to pay for itself on high-value, infrequent bids where internal expertise is thin. For high-volume, lower-value tenders, the day-rate cost per bid can quickly exceed what the contract justifies, making in-house capability or software support the more sensible route.
The true cost of losing bids and opportunity cost
A losing bid is not a cost of zero. Once you commit staff time and external fees to a pursuit, those become sunk costs the moment the outcome is known, regardless of the result. Committed costs, by contrast, are the ones you can still avoid by withdrawing before a deadline, which is why early qualification decisions matter so much to your overall spend.
- Opportunity cost belongs in every calculation: the hours your bid manager spends on a losing tender are hours not spent on business development or a bid you might have won.
- Win rate drives cost-per-win directly: a firm bidding ten times a year at a 20% win rate spends roughly five times its per-bid cost on each contract actually secured.
- Retained operating turnover suffers when tendering spend climbs without a corresponding rise in awards, which is exactly the pattern behind the 22% turnover figure some contractors reported in the Reading study.
How to calculate your own bid cost and cost-per-win
Most suppliers can build a workable figure in four steps, using timesheets and invoices they already hold.
- Capture production costs. Add up internal hours (at graded rates) spent on research, writing, pricing and review for each bid.
- Apportion overheads. Add a share of office, software and management overhead, typically a percentage of direct labour cost rather than a guess.
- Add external fees and opportunity cost. Include consultancy day rates, design costs, and a reasonable estimate of what redeployed staff could otherwise have earned the business.
- Divide total annual bid spend by number of wins. This gives your cost-per-win, the figure that should guide whether tendering is a profitable channel.
A small change in win rate changes this dramatically: moving from a 20% to a 30% win rate can cut cost-per-win by roughly one third if total annual bid spend stays flat.
Worked example with conservative assumptions: say a business spends £15,000 a year on bid production (internal time, overhead apportionment and external fees combined) and wins three of fifteen submitted tenders. Cost-per-bid is £1,000, but cost-per-win is £5,000. If the same spend produced five wins instead of three, cost-per-win would fall to £3,000, a meaningful difference for budgeting purposes even though total spend never changed.
How to reduce your cost-per-win: practical measures and how technology helps
The first and most effective lever is opportunity triage: walking away from poorly-fitting tenders before you commit serious hours is cheaper than writing a strong response to a contract you were never likely to win. Qualification criteria such as relationship strength, technical fit and realistic scoring potential should be checked before a bid/no-bid decision is made, not after drafting has started.
Reusing validated evidence is the second lever. Case studies, method statements and social value content that have scored well before should be stored and adapted rather than rewritten from scratch each time, which is the thinking behind a structured bid writing workflow built around reusable artefacts. Structured collaboration and version control cut the hours lost to duplicated edits and last-minute rewrites, and AI-assisted drafting tools can shorten the first-draft stage considerably when they are grounded in your own prior answers rather than generic text.
A few process changes a team can implement quickly:
- Set a clear bid/no-bid scoring checklist and apply it before resourcing any opportunity.
- Maintain a central evidence library categorised by theme and contract type.
- Track hours per bid stage to spot where time is being lost.
- Review lost bids for scoring feedback and feed it back into your evidence library.
Pro Tip: Review your win/loss ratio quarterly rather than annually, so you catch a declining cost-per-win trend before it affects a full year's tendering budget.
Using these figures in your own planning
Treat published benchmarks as a sanity check, not a target. Before changing strategy, calculate your own historic cost-per-win using the method above, since sector, contract size and procurement route all shift the numbers meaningfully. Build a rolling annual pipeline so bid spend is budgeted across the fiscal year rather than reacting to individual deadlines, and revisit the figure whenever you add a new type of contract to your pursuit list.
A subscription tool or external support tends to pay for itself once your bid volume or win rate makes the time saved worth more than the fee, which is a calculation worth running against your own cost-per-win rather than assuming.
— Syed
An evidence-driven workspace to reduce effort and raise win rates
Reducing cost-per-win usually comes down to two things: spending less time per bid and winning more of the ones you submit. We built BidBlock around both.
What this means for your budgeting:
- Less time rewriting answers, since past responses and case studies are stored and reused.
- Clearer requirements analysis, which reduces the back-and-forth that eats bid-team hours.
- Accreditation tracking built in, so eligibility checks happen earlier in the process.
- Team collaboration and pipeline tracking, so you can see cost-per-bid trends as they develop.
Plans run from a Free tier through to Standard, Pro and Max subscription levels. If cutting bid hours and improving win probability would change your numbers, see the plans and get started.
FAQ
How do I calculate the cost of a tender?
Add internal labour hours at graded rates, apportion a share of overhead, then include external fees such as consultancy or design costs. Divide your total annual bid spend by the number of contracts won to get cost-per-win, which is more useful for budgeting than cost-per-bid alone.
What are tendering costs?
Tendering costs are everything spent preparing and submitting a bid, including staff time, external bid-writing support, design and production, legal review and travel. Research into UK construction tendering found average bid costs run at 0.57% of project value across winning and losing bids.
How much does it cost to bid?
Published research puts the average winning bid cost at £60,208 for contractors and £23,821 for consultants, though actual costs vary widely by sector, contract size and whether you use construction cost benchmarking methods and external support. Outsourced bid-writing support commonly runs at day rates in the region of £450 to £750.
Who pays the tender fee?
Bid preparation costs are normally borne entirely by the bidder, win or lose, and are rarely recoverable. Government guidance on allowable costs explains that bid costs may, in some contract contexts, be chargeable to a contract, but this depends on the specific terms agreed and is not the general rule.
Can bid costs ever be recovered if I lose?
In most commercial and public sector tenders, losing bidders cannot recover their preparation costs, which is why qualification decisions matter so much before committing resource. Some specialist contract types allow bid costs to be treated as allowable costs under agreed terms, as set out in government guidance on allowable costs, but this is the exception rather than the norm.
Sources
- Developing a system for assessing the costs associated with different procurement routes in the construction industry (Professor Will Hughes et al.)
- Allowable costs guidance (UK government)
- Find a tender (UK government)