What should you bid to keep your target margin?
Picking a bid by feel usually means either losing the deal or quietly eating a margin you never had. If cost is uncertain, quote off the quantile, not the hope: the bid that keeps your margin at the confidence you choose.
To keep a 20.0% margin at 80% confidence you must bid at least 22,038 USD. At your proposed 20,000 USD, the margin you can defend at 80% confidence is only about 11.8%, below your target.
Cost estimate, margin & confidence
Results
| Scenario | P50 | P80 | P90 |
|---|---|---|---|
| Cost level | 15,667 USD | 17,630 USD | 18,657 USD |
| Minimum bid for 20.0% margin | 19,583 USD | 22,038 USD | 23,321 USD |
| Margin you’d actually get at 20,000 USD | 21.7% | 11.8% | 6.7% |
Minimum bid = cost at P / (1 − margin). If the margin at your current price falls below your target at the confidence you care about, that price is too low to defend.
Formula
minimum bid at confidence c = cost_c / (1 − margin)
cost_c = mean + z_c·σ, with mean = (O + 4M + P)/6, σ = (P − O)/6
actual margin at price = (price − cost_c) / price
Normal approximation: cost P50/P80/P90 use a normal approximation to a Beta-PERT estimate — a fast, honest single-estimate shortcut.
Related tools
- Will this fixed-price project make money?
- How likely are we to blow the budget?
- Turn a three-point estimate into P50/P80/P90
- P50 vs P80 — which number to price off
Pricing one task off one distribution is the basic move. For a whole project with dependencies and risk events, let the full app simulate thousands of outcomes — or read the methodology first.