How to Create a "Go/No-Go" Process for Bidding on Construction Projects

Should I stay or should I go now? The Clash

Some decisions really are this black and white. However, the decision of whether your construction company should submit a bid for a project isn’t one of them. It’s not a simple check of your backlog. If it’s not where you want it, go for the project. While reality dictates backlog is a consideration, it should not be the only factor when determining whether to enter the construction bidding process.

A survey showed that in 2024, 83% of teams use a go/no-go template to determine if they should enter the construction bidding process and submit an RFP for a project. This is up over 10% from 2020.

As a reminder, the go/no-go process qualifies opportunities for bidding on construction projects. The structured process is based on tailored criteria and guides the decisions of whether to proceed with bidding for a project.

The theory behind the go/no-go process is simple. Completing RFPs and the construction bidding process can be time-consuming. How can companies optimize their time and resources to compete for jobs that are a good fit and increase their chances of success?

Benefits of Adhering to the Go/No-Go Process

The key to creating a go/no-go process is to develop a set of straightforward questions. If the answer is yes to all the questions, then it’s worthwhile entering the construction bidding process. If the answer is no to all questions, it’s an easy no.

But what if firms feel a sense of desperation due to having little in the pipeline? Or what if the market is soft, and the firm needs to keep the team busy or risk losing staff? In that scenario, why not just bid on projects even if they’re not quite right?

Of course, real-world scenarios can encourage firms to enter the construction bidding process despite the ‘no’ answers.

Yet, when companies proceed despite a majority of no’s, they are wasting time and money completing the RFP. They’re diverting staff from other RFPs where the firm is a better fit.

The firm is also likely to have a low win rate, which can lower the morale of the bid team. They will likely feel increased pressure to bid low on future projects. The reduced figure might land the team the job, but it may not yield the profit margin the firm requires.

Even if the firm wins the project at a rate that works for them, the job will probably not go smoothly, given that the answer was ‘no’ to many (or all) of their questions. The short-term gain can turn into a long-term loss. A bad project can harm a firm’s reputation.

On the flip side, if companies only respond to RFPs when all answers (or the great majority) are go, they’re more likely to have a higher hit rate. The success rate buoys the bid team and the overall firm, as it ingrains a feeling of success. Employees feel confident and bold.

The team is more likely to complete the projects successfully. The positive experience enhances the firm’s reputation and can serve as a jumping-off point for a relationship with an owner.

Questions/Scenarios

Before creating the questions for the go/no-go process, firms need to know their goals and priorities. Similar to the educational technique Backward Design, construction firms need to identify their desired destination so they can determine the best way to get there. Once they have a vision for their firm’s future, a firm can determine the types of projects that will help achieve it.

Here are some questions a firm could include as part of its go/no-go process.

Can we compete with competitors based on price and meet or exceed our minimum profit margin?

If a firm has established a minimum profit margin they expect from each project, they can avoid a bidding war, which often turns into a race to the bottom. Having insight into competitors enables companies to assess if the project is right for them, i.e., they can create a winning proposal.

Does this project align with our expertise, or is it a logical expansion?

Experience often wins the day as it empowers companies to develop better bids. However, your firm may want to grow. Is the project at hand similar enough to past work that it provides an opportunity to tap into past expertise and/or add on to it?

Have we worked with the client previously, and is the RFP well-defined?

If the firm has a successful history with the client, its chances of securing the job are higher. The familiarity will help the firm fill in an RFP that lacks clarity. If the same issue exists with an unfamiliar client, the project may turn into a headache.

Can we complete the project within the client’s timeline?

A firm must have sufficient time and resources available within the timeframe set by the client for the project. The most appropriate project will be a significant challenge if the firm struggles to round up sufficient resources when needed. On the other hand, if a firm is striving to grow, it may bid on a project that requires it to add staff/equipment since it’s in line with its long-term goals.

Is this project strategically aligned with both our current business objectives and long-term project roadmap?

Evaluating the value of a project in terms of its current and future impact is challenging. Projects that enhance a firm’s current standing and better position it to achieve its long-term goals are ideal.

Again, knowing future goals is essential.

Does the project have significant potential risks?

Construction projects are inherently risky. Yet, some are riskier than others. Some issues increase risk. These include: Is the funding stream established? Does the client have a reputation? Is the project in a hard-to-reach area? A high level of risk does not necessarily mean saying no, especially if the right fee can be negotiated.

Use Technology to Support Better Bidding Decisions

Construction technology simplifies the decision of whether to enter the construction bidding process. Technology that retains information related to bid history and tracking supports the decision-making process. Estimators, PMs, and leadership can easily review the information and collaborate during the RFP process.

RedTeam’s collaboration tools allow for real-time access to project information throughout the entire project lifecycle. So, bid details are retained in the same place as team availability, financial data, historical information, etc., which streamlines decision-making.

When construction firms develop and follow a structured go/no-go process, it improves efficiency and profitability. Consider adding and or refining the go/no-go strategy to your construction bidding process.

RedTeam can help by streamlining your bidding and project decision-making. Request a demo today.