Guides / Sectors / Thin-margin tenders

Facilities

Thin margins do not forgive the wrong contract.


Facilities and maintenance tenders often operate on tight 3% to 8% operating margins where aggressive KPI abatement regimes or deferred payment terms turn winning contracts into multi-year losses. Qualifying FM opportunities requires rigorous financial stress-testing. Part of our playbook on facilities and maintenance; see also avoiding loss-making contracts and cash-flow terms.

Published: 2 September 2026 · By Andre · Reviewed by Bill · selrob

Takeaways

  • The headline rate is not the job. The schedule is.
  • Uncapped abatement on a thin margin is a risk fail until sized.
  • Volume of tenders is not a reason to skip the gate. It is a reason the gate has to be fast.
  • A four-year deed at a rate you cannot deliver at is a bad year, not a bad month.

Why are FM tenders a different animal?

You tender constantly and you win on price. The pack looks like the last one. The clause that decides profit is in a KPI schedule nobody reads because the close date is Tuesday and there are six more in the inbox. That is how a contract you won becomes three years of quiet losses.

The three axes still apply. Strategy is site, region, scope you can service from the base you have. Capacity is labour, mobilisation, response times. Risk is the schedule: rise-and-fall, abatement, set-off, payment that banks the client. selrob’s facilities page is that split as a product. This page is the pricing risk.

Where does the margin actually die?

Abatement that is uncapped, or capped above what a miss on a busy week costs. Rise-and-fall that does not track the labour you actually buy. Response times that assume a van on every corner. Mobilisation unpaid. Indexation that starts in year two while year one is already thin. Pull those before you price. Flag 7 is uncapped SLA abatement for this reason.

A 2 percent margin with a 5 percent abatement regime is not a 2 percent margin. It is a hope. Size the downside against the firm, not the fee. Question 12 on the scorecard: bad month or bad year. Four years of FM is the second.

How do you gate a high volume?

Day one, every inbound: mandatories, the KPI schedule, the rate file, who would staff it. Twenty minutes. Several should die. That is the system working. A pile of council tenders is not a reason to recycle last month’s price. Recycling is how you miss the clause that changed.

If the estimator is the gate and the writer, the gate will lose. Name an owner who can say no without filling the template. The bid/no-bid guide still holds when the pack is a pricing schedule.

What does a yes look like?

The site is one you can service. The rate covers labour after indexation you believe. Abatement is capped and sized. Payment funds mobilisation. The roster is named. If any of those is a hope, it is a review with a date, or a no. Winning a thin-margin deed you cannot carry is not a win. It is a four-year no-bid you failed to make.

The sibling page is the contract that has already started losing. This page is how you stop signing the next one.

Keep reading

Elsewhere in this guide.

Questions

Worth answering before you close the tab.

Why do thin-margin FM tenders need a bid/no-bid?

Because the headline rate is not the profit. Abatement, indexation and unpaid mobilisation decide whether the four years make money.

When is a facilities tender a no-bid on price?

When you cannot size the abatement, or the rate will not cover labour after the indexation you believe, or mobilisation is unpaid and the firm cannot carry it.

How do you qualify a high volume of FM tenders?

Mandatories, KPI schedule, rate file, roster. Twenty minutes. Several should die the same afternoon.

Book a call

Bring the last tender you regretted.

In 30 minutes we’ll show you the call selrob would have made, and the working behind it.