Tender Strategy

Beyond the Lowest Bid: Why Value, Not Price, Wins Tenders

Australian businesses eyeing government contracts often wonder if the lowest price always secures the deal. In reality, government agencies across Australia have long moved “beyond the lowest bid” model, instead seeking true value for money when awarding tenders—balancing cost with quality, capability, innovation, and compliance to deliver lasting outcomes.

Understanding Value for Money in Tenders

When the government evaluates tenders, “value for money” serves as the guiding principle. This concept considers the total benefits and costs across the entire lifecycle of the good or service, not just the upfront price tag. The aim is to secure the best outcome, factoring in quality, risk management, timelines, sustainability, and local economic benefits alongside price.