A profitable bid can still be the wrong use of scarce capacity

The short answer

Positive gross profit is one input to a bid decision. If a scarce person or capability limits how much work you can accept, the time that a job consumes matters too. Compare feasible alternatives using the same cost definition and time window.

Compare two illustrative opportunities

Project A sells for 24,000, costs 18,000 and earns 6,000 gross profit. It requires 80 hours from a constrained specialist. Project B sells for 18,000, costs 12,000 and also earns 6,000, but requires only 40 hours from that specialist. A has a 25% gross margin; B has a 33.3% gross margin.

If those specialist hours are genuinely the binding constraint, B uses half the scarce time for the same project gross profit. That comparison does not imply that a second B is available or that profit automatically doubles. It identifies a question the bid review should resolve.

Check what the ratio leaves out

Gross profit here includes the entered delivery costs; the ratio is not a universal throughput-accounting measure. A separate internal decision about incremental contribution can use a different cost basis, but do not mix the definitions in one comparison. Both examples also assume the job is won, delivered at the stated cost and collected in full.

Sales effort, uncertainty, collection risk, strategic value and follow-on support can change the decision. A higher profit-per-hour number is not an automatic approval. Use the bid-review checklist to record the considerations that the arithmetic leaves out.

Verify that the capacity is actually scarce

If the specialist has ample free time in the relevant window, the apparent tradeoff may not exist. If another person can perform the work at a different cost or pace, re-estimate that alternative. The capacity calculator can test the available hours, but it assumes interchangeable people; run the constrained role separately.

Dependencies and dates matter as well. Two jobs may require the same person at different times and fit together. Or a nominally small job may interrupt a critical path. Read effort versus duration before treating total hours as a schedule.

Review funding alongside margin

A commercially attractive job can require cash before collection. Use the cash-flow calculator to test the payment sequence. If accepting one job consumes the funding needed for another, make that constraint visible too. Starting cash, gross profit and capacity answer different questions.

Document the chosen alternative

Record which other opportunity or use of time is actually displaced, the plan version and the conditions that would change the decision. An imagined pipeline is not evidence of an available alternative. Revisit the review if staffing, scope or collection assumptions change; do not carry the original ranking forward after its inputs have moved.

Prepared with AI assistance. These are illustrative calculations checked against the calculator code, not client case studies or market benchmarks.