Strategic Intelligence

The Bid Investment
Business Case

UK government strategic suppliers invest an estimated £3.9 billion per year pursuing contracts. This model quantifies that investment by tier, isolates the sunk cost on losing bids, and calculates the financial return from deploying BidEquity's pursuit intelligence and AI bid production services.

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

Total Annual Bid Investment
£3.9bn
37 strategic suppliers · all tiers
Sunk Cost on Losing Bids
£2.6bn
67% of total spend · zero commercial return
Annual Bid Submissions
9,376
across all tiers · 33% baseline win rate

Bid Investment by Tier

Where the £3.9 Billion Goes

Bid volumes derived from FTS award data adjusted for FTS coverage gaps and converted to bid submissions using disclosed supplier win rates. Unit costs calibrated from real bid cost data on UK government contracts.

Tier TCV Range Bids/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 bids before full cost is incurred. Better intelligence at the go/no-go stage means fewer resources committed to opportunities the supplier cannot win.

Bids eliminated 20%
Industry saving: — /yr
Lever B
AI Bid Cost Reduction

Reduces the cost of bids 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 bid 40%
Industry saving: — /yr
Combined Industry Saving
—
per year · both levers
Average Per Supplier
—
per year
Revised Industry Spend
—
after both levers
Indicative Retainer ROI
—
per supplier · £720k retainer

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 % 7%

Serco 6.7% · Mitie 5.2% · Babcock 7.1% · Capita 4.8% (FY2024 reported)

Estimated Bid Spend
—
per year
Sunk Cost on Losses
—
zero commercial return
BidEquity Annual Saving
—
A: — · B: —
Retainer ROI
—
return per £1 invested
Current Pursuit ROI
—
Gross profit ÷ total bid spend today
→
BidEquity Pursuit ROI
—
Same wins · lower cost base
Δ
ROI Improvement
—
Additional return per £1 of bid 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 bid cost · £14m blended
Defence mega 4 FTS unique competitions ÷ 45% coverage × 3.5 strategic bidders Project Marshall: ~£5bn contract = £25m bid 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: Bid spend rates by company type are calibrated from the Serco model (£4.9bn revenue, ~£104m estimated bid spend = 2.1%) and adjusted for deal mix by profile. Win rate adjustment: companies with a lower win rate submit proportionally more bids per £m of order intake — the model scales bid spend by the ratio of baseline (33%) to the company's stated rate. Pursuit ROI = gross profit on UK gov wins ÷ total bid spend.
On Lever B: A 40–50% reduction in bid cost is achievable on large complex pursuits through AI-assisted research synthesis, first-draft proposal generation, compliance matrix automation, and real-time commercial modelling. 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.