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In a highly competitive environment with strict budget constraints, the solution to the cost proposal must not only be compliant but also adaptable, competitive and persuasive.

From a cost side, it is almost impossible to influence a technical proposal. But you can follow seven key basics that will go a long way in making your next proposal a winning cost proposition.

1. Have and use current customer information – Know the market factors that affect prices.

The first step is knowing what interests you all. You are seriously hitting customers without knowing their previous purchase history, their budget pressures, approved program funding, program deductions, customer service and reserves, as well as their independent cost estimates, and whether they are price or performance oriented. You need to acquire your intelligence ethically.

2. Know how much your business costs to operate a business.

We have often heard from many companies that they cannot disclose how much it costs to do the work until the final RFP comes out. It’s a pig. With the RFP draft, you can estimate the cost of the work early. Without an RFP draft, you should have enough procurement intelligence to estimate how much it will cost you – even if it is a broad valuation. Remember this is not exact science and you will become more precise as you approach real RFP. Knowing the cost before will help you be creative in the last step. If you wait until the final RFP comes out, you are too late to make a creative difference in prices (other than cost) because you are too busy guessing about the real cost. With the knowledge of your expenses early on, you can make many creative choices to win.

3. Know the cost to your competitors of doing the same job.

Without competing information, you just speculate on what it takes to win. This information is easily accessible through GSA Advantage, Internet searches, FOIA requests and subscription search services like EZGovOpps and GovWin. Discover who your rival teammates are and how they will bid by looking at the past victories of your competitors and their teammates. Gather information on what corporate investments are most likely to invest in the project and what are their likely approaches to bidding. Learn the little tricks your competitors use to get lower prices like changing jobs to get to a lower base, by introducing productivity-enhancing tools to greener staff. Companies tend to do the same things over time. You must also consider whether your competitors are current candidates. These people tend to take less and less “outside the box” thinking.

4. Provide a well-designed work breakdown structure (WBS) that binds to and supports the performance statement based on estimates.

We believe that without the WBS to evaluate the work mentioned in the statement of work or statement of work, you cannot adequately consider all the elements relating to performance. You will probably omit some elements or double your estimates. We often find that three levels of WBS are sufficient to evaluate performance. Furthermore, we see that suppliers are often evaluated at all levels of the WBS, not just the third level, causing confusion and misjudgment. Once you’ve developed this level of detail, it’s easy to figure out where you can make updates, cuts, or additions to the cost.

5. Actively determine your company’s investment in the project you’re bidding on.

Company investments are those items that your corporation makes to improve project performance or efficiency (training, recruiting, transitions), investment in property, plant and equipment, and corporate reductions at indirect rates. All of these types of investments are ones that should be managed by the corporation and not the items for reimbursement by the Government.

6. Be a company that is easy to do business with.

Give them what they are looking for and more. A winning company is a company that makes judging easy, can keep track of data (technical and cost) in an organized way, and present data in written and electronic form. Even if the RFP does not require an electronic format, still submit it to the Government. Keep all formulas in place so that the evaluator can easily follow your thought processes. Remember, a company that provides them with a written and electronic version that they can go through is likely to make unmarked points with evaluators.

7. Be competitive and be creative about it.

This step is the easiest (really) if you have met all the remaining steps before this one. This means sharpening your pen and your mind on job rates, greening staff, eliminating escalation, competitive fee structure, competitive and new indirect rates, direct bidding whenever possible, and company investments.

If all the details are kept aside, there must be a visible unity of purpose and reasoning among all elements of the proposal. Simply put, you cannot explain something in a technical or management proposal that is not identified by cost. Many (probably most) proposals are very difficult to trace from one volume to another. As it may sound, there should always be a connection between the elements, even if you have to create it yourself.

Most projects or products, implicitly or explicitly, have a work structure. For projects, this is usually like the statement of work structure. For products, it may look very similar to the specification. However, while it may be difficult to come to an agreement on its specifics, such an outcome exists. It is this breakup that is the most acceptable candidate for connecting different volumes.

If there is no specific direction for the request to be collected, this separation would make it reasonable, easy to explain and an important link between the technical and the cost of the proposal. “But the customer didn’t ask us to do it,” you say. Yes, you may be right, but you don’t want to win, do you. Customers want to buy from companies that are easy to do business with. A great way to start making that impression could only be to make your proposal easier to understand than your competition. “But there’s too much work to do to make the prices that way.”, You might say. Do you want to win?

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Source by Marsha Lindquist

 

 

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