Winning starts with smart pricing

If you’re bidding on DLA or other government contracts, price matters, but it’s more than just undercutting the competition. Your pricing needs to be strategic, covering your costs, staying compliant, and ensuring you make money.

To stay competitive and protect your margins, focus on these three core pricing factors when preparing your quote.

1. Know your vendor cost

Always start by asking: What is my cost from the vendor?

If you’re buying through a distributor, understand that you’re likely paying a markup. Whenever possible, try to go direct to the manufacturer. You’ll often save significantly, and that cost savings can give you a pricing edge when bidding.

Tip: Establish direct relationships with manufacturers to improve both cost and response time.

2. Understand your packaging cost

This is where many new bidders lose money.

There’s a big difference between contracts that require ASTM D3951 packaging (standard commercial) versus those that require MIL-STD-2073 (military-grade). The materials, labeling, and labor involved in MIL-STD can increase packaging costs dramatically.

To avoid surprises:

  • Identify the packaging requirement in the RFQ.
  • Get a quote from a packaging company ahead of time.
  • Factor that price into your total bid.
Pro move: Build relationships with contract packaging houses that specialize in military compliance so you get fast, reliable quotes.

3. Define your profit in dollars, not just percentages

Most companies default to a margin percentage, say 15% or 20%. But that approach can be limiting, especially on small or one-time buys.

Instead, flip the model. Ask yourself:

“How much do I actually want to make on this award?”

Whether that number is $2,500 or $5,000, build that into your pricing. This gives you more control and ensures each bid is worth your effort.

Recap: The 3-part bid strategy

Every time you prepare a government contract bid, walk through these three pricing questions:

  1. What is my actual cost from the vendor or manufacturer?
  2. What will it cost to package the item to spec?
  3. What dollar amount do I want to profit from this award?

Answer those correctly, and you’ll build bids that are competitive, compliant, and profitable.

Want to streamline the bidding process?

GovScraper pulls RFQs from DIBBS, flags packaging requirements, and helps you focus only on the contracts that match your profit goals and vendor strengths.
Book a demo and learn how to bid smarter without spending hours each day on RFQ prep.