WINNING TOO MANY JOBS
IS A WARNING SIGN.
A subcontractor winning 50% of their bids is either the best estimator in the market or the cheapest. Almost always the cheapest. A high win rate feels like validation — the phone keeps ringing, the backlog stays full, the crew is busy. But if the overhead rate in the estimate is 10 points below reality, every job won at that rate is priced to underperform. The win rate is confirming the problem, not proving it doesn't exist.
WHAT A 50% WIN RATE
ACTUALLY MEANS.
On a $5M subcontractor bidding 60 jobs per year with a 50% win rate, the company wins 30 jobs. That's competitive. But here's what the financial system is saying underneath the volume:
Pricing Below Market
Priced to the Market
The concrete sub who proved this: a $4.9M concrete contractor winning constantly. Never checked closeout margins. Netting 3.3%. $161K on nearly $5M of work. After CFOS identified the overhead rate as 15 points understated and rebuilt the bid structure, he priced higher, won less, and netted $1.1M the following year on similar revenue. Read the case study →
HOW TO TELL IF YOUR WIN RATE
IS TOO HIGH.
COMPARE WIN RATE TO CLOSEOUT MARGINS
Pull your last 12 months of won bids. For each job, compare the markup applied at bid to the actual net margin at closeout. If you're winning at 20% markup and closing at 8% net when your target is 12%, the gap is structural. The bid is confirming that your price is below what the job costs to execute.
VERIFY THE OVERHEAD RATE — NOT FROM MEMORY
Don't trust the overhead rate you've been using. Build it from scratch: every overhead cost category, projected revenue as the denominator, and field costs correctly excluded. If the rebuilt rate is 3+ points higher than what's in your estimates, you've found the source of the win rate problem. The bids are low because the overhead input is low.
RAISE THE MARKUP ON THE NEXT 10 BIDS AND TRACK THE WIN RATE
If the overhead rate correction moves your markup from 20% to 28%, apply 28% to the next 10 bids. If win rate drops from 50% to 25%, the market was absorbing the difference all along. If win rate stays at 50%, you have a different kind of problem — your competitors are even cheaper than you were. But now you're capturing the margin the market was offering.
