Many times Government Authorities allowing Subcontracting and Offshore Outsourcing Options. If you have not considered offshore options, you may loose the bid as other Vendors/Contractors will consider that option and their bid will be lower accordingly.
So, before submitting your bid, you should ask a question to government authority about Offshore Subcontracting Options. If they are considering Offshore Subcontracting, you should try to reduce the amount of your bid by negotiating your bid with Offshore/Subcontracting Partner.
If you are not submitting your bid for Government Contract, then your offshore outsourcing option becomes more important. You must verify the chances of offshore outsourcing/subcontracting options with your potential client before submitting your bid. Private companies are even worried where the word is being performed. Main concern for them is the budget for their project. In many cases they will consider Offshore Outsourcing.
Once your potential client or government authorities will inform you whether they will consider Offshoring option or not, you can decide you should submit your bid. If they are considering Offshoring option you must consider that option as well.
Sometimes, it is also possible that your potential client even do not know about offshore outsourcing options. If you make them educate about such possibilities, they will verify the same with other bidders.
There are possibilities that they will decide to keep the work onshore for local employment. In such instance, they may reject such lower bid and you may have chances to win contract with your higher bid.
Company A has considered offshore outsourcing option and their bid comes to 10,000 USD for simple CMS based website development including one year maintenance and updates, considering all the work will be performed in India, Philippines, Pakistan or Bangladesh.
Company B has priority to hire local people and so then have decided to perform work in their country only. Now, same bid comes to 50,000 USD
Now, if Company B has verified offshore outsourcing options with client, client will be educated about such options. And if client rejects to go offshore, Company B will win the Tender.
If Company B hadn’t explained the potential chances to go offshore and client even do not know about that, Company A has greater chance to win the RFP.
If Company B comes to know that client is considering Offshoring Options, they can lower their bid to 10,000 USD to 15,000 USD and there are chances to with the contract for Company B as well.