Less than 6% of construction contractors track their bid-hit ratio. The ones who do have a leading indicator that tells them whether pricing is at market before the P&L shows the damage.
You cannot manage what you do not measure. When the overhead rate drifts below actual costs the drift is invisible until the P&L shows compressed margins. By then dozens of underpriced jobs have been won and worked.
Negotiated work has a naturally higher win rate than cold competitive bids. Blending them produces a misleading overall win rate. Track competitive bid win rate separately - that is the number that reflects actual market pricing.
When win rate drops many contractors reduce prices. The correct response is to investigate the cause - overhead rate change, market pricing shift, or GC relationship change - before adjusting prices.
The pattern across SPM engagements is consistent: contractors who come in with high win rates almost always have an overhead rate gap discovered at engagement start.
On clients where win rate was above 35% at engagement start.
After corrected rate is applied to new bids.
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