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Recency and Relevancy: Gaining a Window Into a Competitor’s Past Performance

Earlier this month, we discussed the federal source selection process, including how proposals are reviewed, evaluated, selected, and ultimately awarded.

To recap, we talked about how government officials use multiple sources of information when making award decisions. In this blog, we’d like to address one of the most common factors: Past Performance. Simply put, Past Performance is an assessment of a bidder’s likelihood to successfully perform the contract, based on its history with similar contracts. This is important not just for your own bid, but also for understanding how your competitors will likely score on their past performance, and how you can better counter that with your own approach.

In evaluating a bidder’s past performance, government officials use the Contractor Performance Assessment Reporting System (CPARS). Exclusively available to the government, CPARS includes detailed information on how the bidder has delivered on their previous contracts with the government. This includes their record of meeting requirements and conforming to standards of good workmanship, forecasting and controlling costs, and adhering to schedules. CPARS also evaluates what FAR part 42.1501 refers to as a contractor’s “commitment to reasonable and cooperative behavior and customer satisfaction” on previous government contracts.

Federal decision-makers evaluate contractors’ past performance based on two standards: recency and relevancy. “Recency” refers to how long ago the work was performed, and “relevancy” has to do with how similar this work is to what the current RFP is asking for.

Because FAR 42.1503(4)(d) deems all past performance data as Source Selection Sensitive; information contained in CPARS is not releasable (unless expressly directed by the agency who submitted the data). However, contractors can gather a surprising amount of information on their likely competitors just by leveraging various open-source tools and their industry contacts.

Evaluating Recency and Relevancy

Requests for Proposals typically give specifications for what they deem to be a valid past performance reference. Typically, a good past performance reference is similar in size and scope as the contract you’re pursuing and within a 3–5 year window. Section M of the RFP discloses how these references will be evaluated.

Your analysis of the relevancy of a competitor’s past performance starts with determining which category it is in. For example, is this a product-based contract that involves the development of an item or low to full-rate production? Or is the opportunity calling for a service-based solution such as mission-based support or systems integration and engineering? Especially when the solicitation is looking for a service to be performed, be sure to get a good handle on the contract requirements by breaking them down into simplest terms. For an IT contract, for example: is the agency looking for cloud-based services support? Help desk support? Cybersecurity? The same applies to any product-based procurement.

Good sources of information for competitor past performance analysis include databases like GovWin, DACIS, GovTribe, and BGOV. These databases should be augmented by searching press releases and other news articles for announcement of awards that may not have been captured (or easily found) in one of the above databases. GlassDoor and other social media platforms can be excellent sources of data for contractors that are performing poorly, but a good analyst will always guard against potential bias by taking negative press with a grain of salt.

Finally, as you examine your competitors’ past performance, there are a few questions that are good to consider:

  • Are the contract requirements well within their capabilities, or does their contract record suggest they have “gaps” in their ability that they must fill via teaming?
  • Do they have sufficient experience in designing and manufacturing the product in focus?
  • Have they recently won a large number of programs, and might struggle with bandwidth for the upcoming bid? Will they need to expand their manufacturing capabilities because they are currently performing at max capacity? Or will they need to go on a hiring spree to fill the required positions because this is a new contract type?

All this information is geared toward a single goal—providing your capture team with information that will inform strategy. It gives you the best possible chance to prepare for – and hopefully outmaneuver—your competitors and enhance your win probability.

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Richter & Company Announces New Additions to Competitive Intelligence & Price-to-Win Team

We’re excited to announce two new additions to our team!

Adam Stormer has joined Richter’s Competitive Intelligence team as a Research Analyst. Mr. Stormer began his career in Cyber Forensics and Information Security before earning a Master of Science degree in Applied Intelligence from Mercyhurst University. At Mercyhurst, Mr. Stormer was a team lead for the Beehive Project, a technical collective designed to provide support to emerging businesses and entrepreneurs. In this role, he interacted with clients, program directors, and a team of analysts to create actionable intelligence products to assist in the creation of products and services.

Joining the Richter Price-to-Win team as an Executive Consultant is Fernanda Demas. According to Richter & Company’s PTW Director Gene Metcalf, prior to joining, Ms. Demas provided capture support to federal contractors including cost estimation, training in the development of Basis of Estimates, the facilitation of pricing strategies, and solution development to the firm’s clients. In several previous positions as a project accountant, Ms. Demas developed a comprehensive knowledge of financial management, planning, reporting, and compiling competitive, compliant final submission packages.

Both Mr. Stormer and Ms. Demas say they were drawn to Richter & Company because of its solid reputation in the industry, best-in-class methodology, comprehensive proprietary tools, and the team-oriented work environment the firm’s leadership has created.

“Both Adam and Fernanda bring an excellent combination of industry knowledge, communication skills, and leadership ability to our team,” said Chris Richter “We have every confidence that both Adam and Fernanda have what it takes to provide top-notch support to our customers and increase their win probability in the federal marketplace.”

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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.

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Is An Incumbent “The Man Who Knew Too Much?”

Riddle me this. If knowledge is power, is it ever possible to know too much?

If you watch the 1956 blockbuster “The Man Who Knew Too Much,” you’ll find that Alfred Hitchcock apparently thought so, especially if that “man” was dabbling in the world of international espionage.

But what about the humble government contractor? Is it possible for them to know too much?

If you’re the incumbent who is rebidding in a government contracting scenario, you can absolutely find yourself in the position of knowing too much for your own good.

Let’s back up a bit…

Being an incumbent is a double-edged sword. On one hand, your experience with the customer has given you information that nobody else has. You know what they need, and what they really want whether those needs and desires are clearly spelled out in solicitation documents or not. As the incumbent, you have a level of understanding about what the customer really cares about in a way that your competition does not.

Now in some ways, this knowledge translates to a monstrous leg-up on those who are bidding against you. So what’s the bad news? If you don’t remember that the evaluation process is based on what the RFP actually says, you’re not going to win.

The winning bid will present a basic, reasonable, compliant, threshold solution that’s responsive to the requirements called out in the RFP. As the incumbent, you will need to confine your responses to those and resist submitting a gold-plated solution with a price to match. In this case, using your extra knowledge to provide a more complex solution, even when you are confident that what you’re offering is actually what the customer needs or wants, is a recipe for failure.

This is also time for a reality check. A lot of people believe that the incumbent always has an advantage over the rest of the field. Not surprisingly, incumbents tend to think the same thing. In reality, however, it’s just about 50/50 whether the incumbent wins or not.

It’s easy for an incumbent to fall into the trap of thinking, “My customer loves me. They won’t replace me” when the truth is your federal customer probably couldn’t care less about you. The agency needs a compliant threshold solution at the lowest possible price. It’s really that simple.

I’m reminded of an example from years ago. A special operations command put out a contract in search of a vendor who could customize and modify equipment on a really fast track. The winning contractor did an incredible job on the engineering and fabrication, but they dropped the ball completely on the administration of the contract. Although the contract specified that work would not commence without a task order, the contractor ignored those terms and conditions, causing a processing and billing nightmare for the higher-ups. The boots-on-the-ground folks were happy because they were getting their hands on the product fast, but the agency’s overall satisfaction with the vendor wasn’t great.

As the solicitation documents for this work were being prepared, another company learned about these issues through some savvy competitive analysis. They put together a proposal that promised not only timely, on-budget products but an administrative process that would keep the entire agency’s billing process on the rails. The winning contractor gave the government agency real-time access to their management system, allowing them to generate and authorize task orders immediately. This was innovative, responsive, and ultimately successful. The incumbent was unseated.

If you’re the incumbent, keep in mind the things you’ve learned about the agency’s “corporate personality” but forget value definitions. Answer the requirements. Nothing more. Providing a compliant threshold solution is far more likely to get you the win.

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Evaluating Your Competitors’ Capabilities: Where to Start?

It goes without saying that winning government contracts requires a thorough and intimate understanding of the customer’s wants and needs. In positioning to win, however, it is equally important to understand how other companies (competitors) will attempt to meet those needs. In attempting to study and evaluate your competitors, one of the most fundamental questions to answer is “What do they do?” What are your competitors’ capabilities, and how do they apply?

In evaluating competitor capabilities, start with each of your potential competitor’s websites. Read their capabilities statement. What do they say they can do? What do they list as their products and services? What type of prospects do they target, or have they targeted in the past?

Now take it to the next level. Try to match their claims against reality. They may say they have capabilities in “cybersecurity,” but what type? Do they develop products or just implement other company’s software? Are they all about comprehensive strategies, or do they have a niche? Do they specialize in general prevention, rapid detection, and response, or is their focus endpoint, cloud, application, or network security? Most reputable competitors will not deliberately misrepresent their capabilities intentionally, but you can bet they will exaggerate to make them sound as good as possible. It’s up to the savvy and tenacious analyst to drill down and verify that any claims that competitors make are accurate.

Even an accurate list of capabilities doesn’t tell the whole story. What really matters is whether the competitor has actually put a capability they claim into action …and if so, when, where, and for whom? These are the details that put teeth into your competitors’ claims. Are there testimonials from clients on their site? Finding convincing and compelling evidence that your competitor’s capabilities have been put into action effectively on behalf of a client is what gives them credibility.

Make it a point to find out not only which contracts your competitors have been awarded, but how those projects turned out. Were the contracts shortened or even cancelled because of cost overruns, problems with making deadlines, or other deficiencies? Following a competitor’s social media accounts can also be revealing.

One helpful tool for evaluating competitors’ capabilities is called a Most Important Requirements (MIR) assessment, where you create a list of the customer’s most important requirements and rate each competitor against each of those requirements. This will show you how your competitor’s strengths will align with what the eventual RFP will be looking for. 

Evaluating your competitors will teach you a lot about your business and broaden your knowledge of the industry so that you can refine your business strategy, craft winning bids, and grow your company.

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Assessing the Competition with a Non-Cost Evaluation Model

One of the most important and valuable elements of an effective competitive assessment—as well as a solid capture strategy—is assessing who is the “team to beat,”  the competitor in the strongest position to win. This process highlights the areas where you need to strengthen your capture and proposal efforts so that you can outmaneuver the top competitors and secure a winning spot.

To assess the competitors, analysts develop a non-cost evaluation model based on how the customer is most likely to review proposals to determine which competitor is worthy of an award. In order to create an eval model, you must understand how the customer will evaluate each proposal. There are several ways to determine this.

The first and most valuable source of the customer’s evaluation criteria is Section M of the customer’s Request For Proposal (RFP). This is where the customer provides detailed guidance regarding how they will evaluate proposals and make an award decision.

If, however, the procurement is in its early stages, there likely will be no section M to review because the customer has not yet released the RFP. In these situations, there are other options for developing an eval model, such as a Draft RFP (DRFP), the RFP from a prior iteration of the contract, other RFPs from the same customer, or even something like customer guidance provided in an industry day briefing.

Whatever source you use, carefully examine the language to determine the various evaluation factors the customer will use to assess proposals. These factors may include criteria such as technical approach, management approach, past performance, price, etc.

Once you have identified the various evaluation factors, it is important to also understand the relative importance of those factors. Assigning quantitative values (numbers/percentages) to each of the factors in the eval model is a useful way to calculate a numerical score for each competitor. This enables you to determine who has the highest score, and thus who is in the strongest position to win. The key to developing an effective eval model is to ensure that the factors and point values you assign closely mirror what the customer has indicated.

Building an eval model that reflects the way the customer is likely to review the proposals is just the first step. In order for the process to be helpful, you must populate the model with information on your potential competitors to determine where each is likely to stand. This requires solid research and analysis of your competitors’ capabilities, solutions, strategies, strengths, and weaknesses on the given opportunity.

Creating an eval model is closely connected with understanding the requirements. The more you understand your customer, the more accurate and valuable your eval model is likely to be.

In addition to giving you excellent intelligence on your competitors, an eval model will also reveal or reinforce what is true and what you believe about your firm. For example, an eval model can tell you if you have the internal capabilities to claim the winning position, or if you need to fill gaps or mitigate weaknesses by adjusting your strategy or teaming with other companies.

Eval models vary by client and by opportunity, and are very different if you are bidding on a product or a service. And remember, an eval model should be updated continually throughout the procurement process as you learn more about your competitors and yourself.

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Understanding the Requirements: How to Earn a Winning Edge

It may seem rather obvious that the first step in competing for a federal contract would be to try to understand what the customer is actually asking for. Isn’t that just common sense? And yet a surprising number of companies make the mistake—consciously or subconsciously—of underemphasizing this fundamental principle. Consequently, the resultant proposals are either too self-centered, or worse, non-compliant.

Failing to (a) understand what the customer actually needs and (b) address those needs thoroughly in a proposal is often the reason companies fail in their attempts to secure contracts in the federal marketplace.

How does this happen? It happens when a company focuses too much on convincing the customer to buy what they’re selling rather than first taking the time to understand what exactly the customer needs and then striving to satisfy those needs. This may seem subtle, but there is a vast philosophical difference here that can truly make all the difference between winning and losing.

It’s important to note that every RFP contains explicit and implicit requirements. The explicit requirements are those requirements that are articulated by the customer to all bidders, so that all are equally aware of them. These explicit requirements are the foundation—they are the key components that a contractor MUST address in order to qualify for a given opportunity.

Just because they are explicitly stated does not mean they are clear. Sometimes (okay let’s be honest, much of the time), the customer doesn’t actually know what they want. Sometimes (if you’re lucky), the customer will be conscious of their limitations, and will seek input from industry (via RFI, sources sought, Draft RFP, etc.) to help them understand what is possible, but not always. Unfortunately, there are many times where the customer has no clue what they want, but thinks they do, and moves forward at ramming speed.

Behind the explicit requirements, there is typically a hidden list of unspoken—or implicit—requirements that represent the customer’s true definition of value. These are what we call “customer hot buttons,” and every customer has them. A customer’s hot buttons will motivate them, inspire them, or perhaps even keep them up at night. Identifying and addressing these implicit requirements is where a winning strategy beings—it is how a company differentiates themselves from their peers and gains a competitive edge.

You may ask, how does one go about identifying a customer’s implicit requirements? The answer is … (you guessed it!) … good old fashioned customer intimacy. Know your customer. Study your customer. LISTEN to your customer! Talk to others in the industry about your customer. The ultimate source of your customer’s hot buttons is always your customer.

Once you have come to understand explicit and implicit requirements of an opportunity, THEN you can begin matching them against your internal capabilities. Your strengths and weaknesses will emerge quickly, enabling you to develop strategies for leveraging and enhancing your strengths and mitigating your weaknesses (e.g., teaming).

The better you understand your customer’s explicit and implicit requirements, the better positioned you will be to enhance your proposal in ways that your customer appreciates and values. Don’t assume you know the answer, don’t be afraid to ask “dumb questions,” and don’t try to sell what you have before you understand what your customer wants.

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Price To Win: Know When to Hold ‘em and When to Fold ‘em

In today’s federal marketplace, anyone can compete for business.

And anyone can win—at least some of the time. It’s the possible losses, however, that can provide more than experience to learn from—they can, at times, be ruinous.

Therein lies the rub.

Because opportunity incurs costs—in resources, bid and proposal feeds, and your staff’s time, smart would-be government contractors know that Price To Win (PTW) strategies are a key part of capture. Smart government contractors can tell you that identifying your Price To Win position is more than a number; a true PTW strategy reflects the complex relationship between your customer needs, their allocated budget, and their spending patterns.

Industry expert Randy Richter, Chairman and Price To Win Director at Richter & Company will tell you that even smarter contractors take the definition of PTW a bit further. These competitors know that determining their PTW position for a given opportunity not only involves factoring in the impact of their customers’ needs, budgets, and spending patterns, but also analyzes their competitors’ solutions, strategies, tactics and degree of aggressiveness throughout the bid cycle.

But only the smartest contractors, says Richter, understand when the PTW process should actually begin. “Some will say that the process should begin early in the life cycle of the bidding process, but in reality, the smartest competitors begin crafting their PTW strategies well before a draft RFP is in place,” he says. “The wisest decision a contractor can make is not to try to decide how to win a bid, but whether to compete at all. Sometimes, the better part of valor in government contracting is to step back from a given opportunity so you can live to fight another day.”

Richter says his firm’s PTW support is provided by experienced analysts who understand the government process, know how to price, and can think outside of the box. “We train our team to ethically gather information, analyze it to create actionable intelligence, and develop solid assumptions,” said Richter. “We then customize our proven processes and tools that we’ve developed to each potential competitor’s situation to produce accurate, defensible results.”

There are two ways to build a PTW strategy:

  • The Top Down process uses historical data, including information on bids previously awarded and budget information to identify the parties’ “comfort zones.” In other words, a Top Down determines in what range customers tend to award bids, and where competitors tend to receive them. The Top Down approach is best used in early gate reviews to help firms decide whether to compete at all, and/or to develop proactive solutions using “design to cost” approaches. Effective Top Down efforts can be pursued easily and affordably as ongoing projects because very little data is required.
  • A Bottom Up PTW analysis is best performed as soon as customer requirements and evaluation processes are known, typically once the DRFP is released. Based on identifying targeted competitors’ solutions, building up their costs, and identifying how these costs will be prices using their strategies, is the foundation of Bottom Up PTW reviews. Results are updated as new solicitation documents become available, with work continuing to cover amendments, ENs, FPRs, and negotiations.

Once you have your PTW position, what needs to happen next? To compete, or not to compete. To engage in the game and work to win the hand, or—like The Gambler—know when to walk away and when to run? Hold ‘em or fold ‘em?

Richter says this is one of the most important moments in the entire process—where a business decision must be made that only the potential federal contractor can make. “Our job is to show our client the position they need to achieve to beat their competitors, but whether they should attempt to move their company into that ‘win zone’ is entirely up to the firm’s leadership.

If you need more information to decide about whether to engage, my best advice is to ask questions,” said Richter. “I always told my kids that the only dumb question is the one you don’t ask, and I extend that advice to our clients today. Unless the project is classified, of course, why not take a chance? Ask the question. You just might get the answer you need to make an informed decision.”

Richter & Company’s consistent process, innovative tools and experienced staff have helped customers win over $30 billion since 2006.