Price= Cost + Strategy

With sequestration as an ongoing threat to the federal contracting community, more companies are getting more creative in their strategies.

At Richter & Company, we believe that Price = Cost + Strategy.  Overall business strategy is the biggest driver in making business decisions, and the biggest factor in determining the ultimate price to win.  Not cost plus fee.

If a company is looking to gain an important federal customer, they may invest in the program so much that they bid zero fee.  If a company is extremely aggressive in going after a specific program, they may create new overhead pools to bring down their wrap rates.  Companies offering goods will often pressure their suppliers; companies offering services will get creative in hiring at specific labor percentiles.  Management challenges drive down the total evaluated price.

Once a strategy has been decided on, a team knows the mentality and the creativity they need to take in pursuing a specific opportunity.  Richter & Company’s seasoned professionals can help you identify strategies your competitors are likely to take, and help your company determine the ultimate price to win.

 

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