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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.