Strategic Intelligence

The Pursuit Viability
Business Case

UK government strategic suppliers invest an estimated £3.3 billion per year pursuing contracts. This model quantifies that investment by tier, isolates the sunk cost on losing pursuits, and calculates the financial return from deploying BidEquity's pursuit intelligence and AI pursuit production services.

Volume: FTS award data · 37 UK government strategic suppliers · trailing 12 months to April 2026 · Unit costs: calibrated from disclosed pursuit costs on real UK government contracts · April 2026

Total Annual Pursuit Investment
£3.3bn
37 strategic suppliers · ~2% cost-of-sale on £173bn of TCV won
Sunk Cost on Losing Pursuits
£2.2bn
~65% of total spend · zero commercial return
Strategic Supplier Wins / Year
1,302
unique competitions · forensic per-contract analysis

TCV and cost-of-sale figures: BidEquity analysis of publicly available UK government contract award data — total contract value of strategic-supplier wins in the 12-month study window: £172.8bn · cost-of-sale ratio: 1.93% (~2%) · 1,302 unique competitions · April 2026.

Pursuit Investment by Tier · Illustrative Breakdown

Where the £3.3 Billion Goes

The headline £3.3bn is from the 25 April 2026 forensic per-contract model. The tier table below uses the original tier-based view as an illustrative breakdown — the per-tier numbers are indicative of relative volume and effort by contract size; the correct figures are in the methodology document.

Tier TCV Range Pursuits/yr Unit Cost Total Spend Share

* Framework call-off volume estimated — FTS captures <15% of this tier. All other tiers use FTS unique competition counts, adjusted for FTS coverage rate and multiplied by estimated strategic bidders per competition.

BidEquity Value Model

The Two Levers

BidEquity creates value through two independent and compounding mechanisms. Adjust the assumptions — the industry impact and your company calculator update in real time.

Lever A
Pursuit Selection

Eliminates pursuits before full cost is incurred. Better intelligence at the go/no-go stage means fewer resources committed to opportunities the supplier cannot win.

Pursuits eliminated 20%
Industry saving: — /yr
Lever B
AI Pursuit Cost Reduction

Reduces the cost of pursuits that proceed. AI-assisted research, first-draft writing, compliance checking, and commercial modelling reduce team effort at every stage — including large complex pursuits.

Cost reduction per pursuit 40%
Industry saving: — /yr
Combined Industry Saving
—
per year · both levers
Average Per Supplier
—
per year
Revised Industry Spend
—
after both levers

Your Company

Personalised Business Case

Select your company profile, enter your figures, and adjust the win rate and margin assumptions. Lever A and Lever B carry through from the model above.

Win Rate 33%

Serco discloses 32% · Capita discloses 64% (different denominators — see methodology)

Operating Margin % 6%

FY2024 anchors: Construction 2–4% · Outsourcer / FM 5–7% · Defence 7–10% · Engineering consulting ~10% · IT consulting ~13% · Management consulting 15–20% · Source: published annual reports (Companies House)

Estimated Pursuit Spend
—
per year
Sunk Cost on Losses
—
zero commercial return
BidEquity Annual Saving
—
A: — · B: —
Current Pursuit ROI
—
Gross profit ÷ total pursuit spend today
→
BidEquity Pursuit ROI
—
Same wins · lower cost base
Δ
ROI Improvement
—
Additional return per £1 of pursuit investment

Methodology & Assumptions

How the Model is Built

Tier Volume derivation Unit cost anchor
Framework call-off Bottom-up estimate — FTS captures <15% of this tier; framework call-offs not individually notified 4 people · 2–3 weeks · £3,500/person-week = £35k empirical
Notified small 63 FTS unique competitions ÷ 55% coverage × 4.5 strategic bidders Interpolated from framework anchor and notified mid calibration
Notified mid 42 FTS unique competitions ÷ 70% coverage × 5.5 strategic bidders £400k at £35m / 2–3 month ITT · £750k–£1m at £100m / 8-month process
Major services 48 FTS unique competitions ÷ 75% coverage × 5.5 strategic bidders £1m lower bound (direct experience) · £3m+ upper bound · £1.5m blended
Strategic programme 27 FTS unique competitions ÷ 80% coverage × 4.5 strategic bidders Project Selborne: £1.2bn contract · 2-year pursuit = £12m pursuit cost · £14m blended
Defence mega 4 FTS unique competitions ÷ 45% coverage × 3.5 strategic bidders Project Marshall: ~£5bn contract = £25m pursuit cost
On volume: FTS unique competition counts deduplicate consortium and multi-lot award notices. Coverage corrections account for framework call-offs at £25m+ tier (notified under PCR 2015 but inconsistently) and defence/security exemptions at the mega tier. Strategic bidder counts are estimated from observed average supplier appointments per competition (FTS total_bids field) cross-checked against market knowledge of qualified prime contractors per sector.
On unit costs: All costs are fully-loaded (staff time, overhead, management, external advisors, pricing support). Loaded rate calibrated at £3,500 per person-week from empirical framework call-off data. Major contract costs include senior partner time, red team reviews, independent pricing committees, TUPE analysis, legal, and mobilisation planning for complex service contracts.
On the company calculator: Pursuit spend rates by company type are calibrated from a large outsourcer's published annual report (£4.9bn revenue, ~£104m estimated pursuit spend = 2.1%) and adjusted for deal mix by profile. The IT consulting, engineering consulting, and management consulting profiles are estimated lower than outsourcing (1.0–1.5% of revenue) on the basis that consulting pursuits are smaller and more numerous than mega outsourcing pursuits — these three rates are unanchored and should be re-calibrated against a real consulting client P&L when one becomes available. Operating margin defaults switch with the profile to reflect the very different economics across this client list — drag the slider to model a specific firm. Win rate adjustment: companies with a lower win rate submit proportionally more pursuits per £m of order intake — the model scales pursuit spend by the ratio of baseline (33%) to the company's stated rate. Pursuit ROI = gross profit on UK gov wins ÷ total pursuit spend.
On Lever B: A 40–50% reduction in pursuit cost is achievable on large complex pursuits through AI-assisted research synthesis, first-draft proposal generation, compliance matrix automation, and real-time commercial modelling. This is BidEquity's own derived estimate, based on impact analysis of AI-enabled methodology applied to real pursuit workflows. The saving is not uniform — it is highest on research-heavy phases (S1–S3 of a competitive dialogue) and lowest on governance-intensive activities (BAFO, board sign-off, legal review). The slider allows conservative and stretch scenarios.