How to benchmark pricing against comparable contracts

Most lost bids aren't lost on capability — they're lost on price. Either the number was too high to win, or too low to be credible. The fastest way to land in the right zone is to benchmark against comparable contracts the same agency has already awarded.

Here's how we do it inside RFQIntern, and how you can do it manually if you're starting from scratch.

1. Define "comparable"

A comparable contract shares three things with your RFQ:

• Agency or agency cluster (e.g. Defence, Services Australia, the Department of Home Affairs)
• UNSPSC category (the 8-digit procurement classification)
• Scale — value within roughly ±50% of the expected contract value

Don't filter too tightly. A contract from a sibling agency in the same category is usually a better signal than a contract from the same agency two years ago in a different category.

2. Pull a 24-month window

Anything older than two years is noise — vendor panels rotate, rates shift, and procurement preferences move. Pull every awarded contract in your comparable set from the last 24 months and look at the distribution, not the average.

You're looking for:

• Median — the realistic winning price
• 25th percentile — the aggressive number that still wins
• 75th percentile — where you start losing on price alone

3. Adjust for known differences

Comparable doesn't mean identical. Adjust the median up or down for:

• Term length — a 3-year contract should be cheaper per-month than a 12-month contract
• Scope inclusions — does the RFQ include implementation, training, or support that the comparable didn't?
• Panel vs open — panel arrangements typically clear at 10-15% below open-market rates

4. Stress-test against the agency's recent behaviour

Some agencies have a clear pattern of awarding to the lowest compliant bid. Others weight quality heavily and consistently award above the median. Look at the last 5-10 awards from the buying agency in your category — if they're all clustered near the lowest bid, price aggressively. If they're spread across the range, you have room to compete on value.

5. Write the price story

Whatever number you submit, the buyer needs to be able to defend it internally. Include:

• A one-paragraph rationale that ties your price to scope inclusions
• A breakdown that makes apples-to-apples comparison easy
• Optional alternatives (e.g. "remove training and the price drops to $X")

The buyer reading your bid is often a procurement officer who needs to justify the recommendation to a delegate. Make their job easy.

What RFQIntern does automatically

Every RFQ you upload gets matched against the full AusTender contract history. You see the comparable set, the price distribution, and a recommended bid range tied to the buying agency's award pattern — usually in under 30 seconds.

Try it on your next RFQ.