How to Assess Risk in Tendering: Step-by-Step Guide & Risk Register Example

How to Assess Risk in Tendering — Practical Steps & Risk Register

Simple, actionable approach for tender teams and bid managers to identify, score and mitigate risks before submission.

Assessing risk in tendering means thinking ahead about what could go wrong — commercially, legally, operationally or externally — then planning how to reduce those risks so your bid stays competitive and deliverable.

Step-by-step approach

1. Read & map requirements. Break the tender document into sections (scope, timeline, payments, deliverables, compliance) and list obligations the bidder must meet.
2. Identify risks by category. List what could fail under each heading (see categories below).
3. Estimate probability & impact. For each risk, decide how likely it is (Low / Medium / High) and how bad the consequence would be (Low / Medium / High).
4. Prioritise. Focus first on risks with High probability × High impact — these are showstoppers.
5. Assign owner & mitigation. For every risk write who owns it and what you will do to reduce probability or impact (controls, contingencies, insurance, contract clauses).
6. Record in a Risk Register. Keep the register live during bid preparation and hand it to operations if you win.
7. Review & rehearse. Do a final risk review before submission and prepare answers for clarification/Q&A that might be raised by the client.

Common risk categories (and what to check)

• Commercial — underpricing, incorrect cost assumptions, hidden costs, payment terms, FX exposure.
• Legal & Compliance — missed mandatory documents, local law conflicts, contract clauses that increase liability.
• Operational & Delivery — insufficient staff, lead-time from suppliers, logistics, inability to scale.
• Technical — system integration, cybersecurity, quality standards not met.
• Reputation — poor references, prior incidents, negative press that may affect client confidence.
• External — political risk, regulatory change, market volatility, natural events.

Simple Risk Register (template)

Use this table during bid preparation. Put highest priority at the top.

#	Risk	Category	Probability	Impact	Score	Mitigation / Control	Owner
1	Key equipment lead time > contract start	Operational	High	High	High	Validate suppliers now; hold contingency stock; include reasonable lead-time clause	Supply Manager
2	Payment delays by client	Commercial	Medium	High	High	Request advance payment; set milestones; cashflow buffer	Finance Lead
3	Non-compliance with local data law	Legal	Medium	Medium	Medium	Obtain legal opinion; design compliant data flows; ISO controls	Legal / IT

Note: Score = a qualitative view combining probability and impact (e.g., Low, Medium, High). For larger bids you can use numeric scoring (1–5) and calculate Risk Exposure = Probability × Impact.

Practical mitigations & controls

• Contingency costs: Add a realistic contingency line to your price or absorb only manageable risks.
• Contract language: Propose balanced clauses (force majeure, change orders, price review for taxes/FX).
• Proof of capacity: Get supplier letters of intent, staffing plans, and sample SOPs to reduce delivery risk perception.
• Insurance & bonds: Use performance bonds, professional indemnity, or specialized insurance for high-risk areas.
• Quality gates: Define acceptance tests, milestone sign-offs, and reporting to the client.
• Escalation plan: Assign a single bid/contract owner and an internal rapid-response team for issues.

How to present risk in your bid

Clients dislike surprises. Be honest and show you recognise the risks and have a credible plan to manage them. A short risk summary table in the technical proposal + a high-level Risk Register in the appendices is effective.

Example structure to include in your bid:

• Top 5 risks (one-sentence each)
• Mitigation actions & residual risk
• Who will manage each risk
• Contingency cost or timeline impact (if any)

Quick checklist before submission

• Have you populated the Risk Register and reviewed it with Ops, Finance and Legal?
• Are supplier lead-times confirmed in writing?
• Have you stress-tested cashflow (worst-case scenario)?
• Do contract terms protect you against unpredictable external changes?
• Is there an escalation & incident response plan?

Final thought: Risk assessment is not about avoiding all risks — it’s about choosing which risks to accept, which to transfer, and which to mitigate. A clear, honest risk plan makes your proposal more credible and your delivery more reliable.

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