Is the feasibility study worth it before you bid?
A $2,000,000 contract is on the table and your team wants to pitch something bold. The bold route needs a $150,000 feasibility study first, and there is only a one in four chance the study says the idea is buildable at all. This template turns that gamble into one number: the win rate your bold concept has to clear before the study is worth paying for.
Words on this sheet
- Expected value: The average payoff you would get if you faced this same choice many times, with each outcome weighted by its chance.
Operations Intermediate Goal Seek free
After you install, this is the model to open.
Should We Pay for a Feasibility Study Before Bidding?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
The answer
The sheet compares three paths, then Goal Seek finds the point where paying for the study stops making sense.
- Study path, expected value
- $250,000 after the $150,000 study cost
- Conventional bid now
- $100,000 no study, 15% win rate
- What the study buys you
- +$150,000 at an 80% bold win rate
- Breakeven bold win rate
- 50% one click of Goal Seek
At the loaded assumptions the study path is worth $250,000 against $100,000 for going conventional straight away, so the study adds $150,000 of expected value. Goal Seek drives that advantage to zero and lands on 50%: the bold concept has to win at least half the time it gets submitted, or the study is money burned. The same sheet shows the study is cheap at the price when you believe in the bold pitch, since at an 80% win rate you could pay up to $300,000 for it and still break even against bidding conventional.
The model
Seven assumptions on the sheet, all of them things a bid team already argues about in the room.
| Contract value if we win | $2,000,000 |
| Feasibility study cost | $150,000 |
| Probability the study clears the bold concept | 25% |
| Bold concept development cost | $300,000 |
| Probability of winning with the bold concept | 80% (the number to test) |
| Conventional proposal development cost | $200,000 |
| Probability of winning with the conventional proposal | 15% |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
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Every model like this one, and the method behind them: What-if analysis in Google Sheets.