estimating-price-to-win

Estimating Price-to-Win

Estimate the price the bid has to reach to win — built from the customer's budget and competitors' likely pricing, not from the team's own cost. Price-to-win (PTW) and a bottom-up cost estimate answer different questions. The cost estimate says what the work costs the team. PTW says what the customer is willing and likely to pay the winner. When those two numbers differ, PTW analysis finds the levers that close the gap — or proves the bid cannot be won profitably.

When to use this skill

Use this skill during capture, after a competitive assessment exists, to establish the price target that shapes the win strategy and, later, the cost volume. Re-run it when the competitive picture or budget signals change, and again when the RFP clarifies the contract type, evaluation weighting, and CLIN structure.

This skill estimates the target. It does not build the bottom-up cost estimate or write the cost volume narrative — that is narrating-cost-volumes. It hands the target to that skill and to developing-win-strategy.

Inputs

Preferred upstream artifacts:

• 00-opportunity-profile.md: contract type, estimated value, period of performance, scope.
• 02-capture-plan.md: customer budget signals and acquisition history.
• 03-competitive-assessment.md: the competitors and their assessed price postures and cost structures. PTW depends heavily on this; run analyzing-competitors first if it is missing.

Without the competitive assessment, the skill can still produce a budget-based estimate, but it must flag that the competitor-price leg of the analysis is missing and confidence is reduced.

Read ../../shared/glossary.md, ../../shared/federal-solicitation-primer.md, and ../../shared/pursuit-workspace.md if not already read this session.

Intake

Ask these as a numbered list. Skip what upstream artifacts answer.

1. The buy. Contract type (FFP, T&M, cost-reimbursement, hybrid), scope, period of performance including option years, and CLIN structure if known.
2. The evaluation. Is the approach best-value tradeoff or LPTA? How is price weighted against non-price factors? For cost-reimbursement work, will the government perform a cost-realism analysis? (If the RFP is out, Section M answers this.)
3. Budget signals. What is known or assessed about the customer's budget — the funding line, an independent government cost estimate if signaled, the prior contract's value, or the value of comparable awards?
4. The team's cost picture. What is the team's rough bottom-up cost view, if any — labor mix, wrap rates, subcontractor content, escalation assumptions? (Used to size the gap, not to set the target.)
5. Pricing flexibility. Where does the team have real room to move — labor mix, indirect rates, fee, escalation, subcontractor selection, solution scope choices, the make/buy split?
6. Strategic posture. Is this a must-win where the team will price thin, a margin-priority bid, or somewhere between?