Posted on

When It’s Time to Rebid a Contract: Avoiding Incumbentitis

avoiding contract rebid incumbentitis graphic

Where and when is a little knowledge a dangerous thing?

Sometimes, when it’s time to rebid a government contract in the federal marketplace, knowing more than your competitors do can be the beginning of the end.

In other words, when you are the incumbent—that is, the company that currently owns the contract and who has been working on it for years, it’s critical that you realize that the historical knowledge you have accumulated in that time is a double-edged sword. 

There’s a good chance that the price you come up with will be among the higher bids submitted unless you keep some important considerations in mind. Here are three symptoms of incumbentitis that can be your undoing if you’re not careful:

Not Pricing Precisely to the Requirements

When the company posts an RFP, incumbents often have difficulty pricing to the exact requirements, especially when their experience indicates that these requirements don’t reflect what the potential client will actually need. If an RFP specifies 80 units, and the incumbent has been producing 100+ units for the past five years, it’s hard to resist the temptation to reflect that in their pricing. Instead of showing the incumbent’s superior insight and experience, including the pricing for what they think they know versus what the RFP actually calls for, only results in a higher bottom line that frequently costs them the contract.

Giving Staff Jobs’ Protection Top Priority

The incumbent also needs to stay focused on the goal of winning the job again. That means they need to emphasize the creation of a PTW strategy instead of focusing on protecting the jobs of the people who are currently working the job being re-bid. For better or worse, the workforce that has been on the contract from the beginning is more experienced and likely more expensive now than an entry-level staff is going to be. Despite the intuitive benefits of keeping a more experienced workforce on the contract, the incumbent’s estimators must still keep the final cost of the proposal in mind as it will likely compare to their competitors’ pricing when rebidding a job.

Overestimating History and Experience

Another just as insidious miscalculation that an incumbent can make is jumping to the conclusion that their history with the company issuing the RFP will count for more than it actually does. “What have you done for me lately?” is still the mindset at the majority of agencies, making securing services at the lowest cost the priority.

If you’re an incumbent who wants to win a rebid, you need to be both literal and humble. Pay careful attention to what the RFP is actually calling for, and resist the temptation to fill in what you think you know. Focus on PTW instead of job protection, and be humble enough to understand that your previous relationship with the company or agency that has filed the RFP is not necessary a big plus—in fact, if you’re not careful, it can actually prove to be a hindrance to you actually getting the contract again on rebid.