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Seven Tips for Navigating 4Q18

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As we start into the last government fiscal quarter, it is feast or famine time. Some have hit the beaches, getting some much-needed R&R and family time. Some are heads-down in proposal mode, worried about when the next one will hit. Others are in purgatory, the stretch between proposal submission and proposal award, with their fingers crossed thinking about the to-do list should they win.

All in all, summer is notoriously a time for going all out or taking off in the federal space. The battle rhythm is hard to hit. Here are some key points to consider, if only for your sanity.

  • Proposal Hell – make sure you’ve locked in the proposals you plan on bidding this summer. If it isn’t in your pipeline and you haven’t been tracking it, you aren’t ready to prime.  Don’t burn out your team on a bluebird, low probability win. You’re going to need them for your must wins.
  • Proposal Heaven – It’s late in the game, but make sure your templates are up to date and ready to bang out. Opposite of above, be ready to turn a bluebird subcontracting proposal over quickly. If you are doing less of the heavy lift, take more risk and bid more. This is where your templates can greatly reduce effort and your team can respond with agility. Besides, some percentage of revenue is much better than no revenue. Expand your book of business without needing to prime everything.
  • Pricing – As you close June’s books, have your folks review with leadership actual vs. planned for the first half of the year. Is your multiplier running as you expected? Does your pricing strategy for the summer need to be adjusted? Do it now before you turn in those bids. What is the impact for your proposal? Where can you tighten up? Impact on Operations (particularly CPFF work)?
  • Recruiting – It’s a tight market and it’s hard to compete for key folks. Be aware of summer schedules and be flexible as an employer. If they can’t interview in the next two weeks, it’s not necessarily because they aren’t interested. Adjust your expectations for days to hire.
  • Leadership and Recruiting – It’s a great time to schedule those pipeline candidates for coffee where you can. They want to interact with leadership, not the recruiter. Take the time to touch base so when the contract award hits, you can move quickly.
  • Mental Health – This is important for everyone. Take the vacation, take the time off. Get off your phone and dear god, stop driving your team endlessly. If leadership can’t take a vacation and check out for a bit, what have you done wrong in your business? Delegate, empower and document. This goes for CEOs to administrative staff. Absolutely no one is irreplaceable. Create an environment where taking time off is actually a good thing, not something that is frowned upon.
  • Be Efficient (a tip from Courtney Fairchild of Global Services) There will be a great deal of opportunities arriving at the end of the fiscal year buying season, but working smart will save you valuable time and energy. Looking ahead at forecasts; touching base with current government clients; having up-to-date GSA schedules with all the services and products you offer, and being mindful of micro-purchase thresholds can provide meaningful wins and cash flow.

 

Before you disconnect for a bit- get everything in order to jump back in well-rested and energized. If you find you’re a little light on recruiting or pricing preparation, let BOOST know. We’re happy to jump in and have a conversation with you to see where you can tighten up and delegate when possible. Email [email protected] and let’s talk.

Circle of Pricing

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Pricing terminology is confusing! Everyone uses the language differently – with different philosophies on pricing, different terms for the stages of strategic pricing and a lack of consistency for terms. All further complicated by which government agency you serve.

Here is the circle of life as it pertains to pricing in a nutshell:

Before the RFP Drops

Competitive Analysis/Price to Compete–this is looking at all external factors to understand your competition and determine what the competitive landscape will be. Think of this as coming up with a range of what would be competitive. This includes taking the following into consideration:

  • Competition and assessing your competitor’s rates
  • Government customer’s budget – current funding and projected forecasted spending
  • Customer’s previous history and buying decisions

This is normally done well in advance of the RFP dropping and can be critical to the bid/no-bid decision. It also serves as a guide for strategic planning and vision. Are you looking at opportunities that make sense for your company?

Draft RFP/Initial RFP 

Price to Win – this is a bottom-up build based on the draft RFP documents and final RFP documents. The end result is to model the Total Evaluated Price (TEP).

The inputs into the TEP (for example, the technical solution), are determined during the Competitive Analysis.

The outputs of the Price to Win analysis are to recommend specific strategies identified in competitors that can be incorporated into your internal pricing strategy. Price to Win should provide you with a comparison of labor categories, location, etc that are being priced by your competitors. You can use this information to compare to your own approach and make adjustments to your solution and to your pricing.

Strategic Pricing/Internal Focus – this is the bottom up and top down approach towards pricing out your technical solution. When done right, this is in lockstep with the technical team from the beginning. Factors taken into consideration:

  • Lines of code, widgets required
  • Hours and labor categories associated with each task, level of expertise required, labor rate
  • Travel/ODCs, subcontractors as required
  • Geographical location
  • Quality Assurance/Testing process
  • Certifications required
  • Multipliers/Wrap-rates used
  • Fee analysis
  • Assumptions documented

Depending on available information, relationship with the agency and when the technical solution is developed, this should be done in advance of the final RFP hitting the street (in a perfect world).

After the RFP Drops

Proposal Pricing/Cost Volume/RFP Based – the actual cost volume, narrative and documentation for the audit file. This is the hard-core spreadsheet work, section B, documentation for the cost volume, and everything associated with the proposal as it relates to cost. Ideally, this is done with as much lead time as possible. In reality, it is always one of the last items to be complete as the pricer is waiting on subcontractor submissions, final verification of the staffing plan and any other shenanigans that come up in a color review. The goal is always to have it done in time for a thorough review. The key here is compliance, compliance, compliance. Follow the RFP to the T, focus on checking boxes and keep it simple.

If you need any help with the above, please reach out to BOOST. We have SME’s and strategic pricing experts who focus on each of the above areas and can support any phase of the pricing lifecycle.

Why Pricing?

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BOOST is excited to announce the launch of our new strategic pricing initiative, designed to support your proposal pricing needs and provide Price to Win strategy that incorporates all back office functions. We want you to win work, grow and succeed. Strategic pricing can get you there. 

Pricing impacts absolutely everything in an organization. If you haven’t been thinking about it strategically, or have just relied on your accounting shop to pull together a spreadsheet, you are going about it all wrong.

Here’s what I mean:

Capture –

  • How much does this customer have in the budget?
  • What did the incumbent bid?
  • Is it worth it to pursue this strategy?
  • Is this a profit play or increase past performance, new client, new offerings?
  • Impact to teaming decisions and teammates?
  • Did you know that Capture “owns” pricing? They’re ultimately responsible for the bid price.

Proposal Team –

  • What key personnel do we bid?
  • What type of labor mix will show the customer that we can deliver?
  • What price will come in competitively?
  • How do we price our solution?
  • How will our competitors bid?
  • How will we ghost weaknesses?
  • How can the pricing volume help win themes?
  • Other volumes impacted by price, such as SB volume, Contracts volume?

Recruiting –

  • Who are the key personnel and how can I ensure exclusivity (if possible)?
  • What is the geographic location, skill set and salary rates we need to start pipelining beforehand and hire in execution?
  • Greening plan? Innovative hiring solutions for continuity of ops over the contract years?
  • What flexibility do we have on credentials?
  • What type of benefits can we offer to supplement for lower base salaries?

HR –

  • What training do we need to offer to current staff?
  • Who can move from existing work to new work, allowing for career path?
  • How do we manage the workforce needs of the new team?
  • If changing badges, how do we ensure they understand our culture, benefits, etc.?
  • What is the cultural impact to the organization?

Operations –

  • How soon can we transition fully and hire?
  • Will we be stuck managing a team of unhappy badge changers?
  • What is the impact to the other projects if we trade players?
  • How can we keep the customer happy with a new team?
  • How can we hire the talent we need at the salaries we bid?
  • How do we overcome a small (or non-existent) annual increase and keep the team motivated?
  • How will the contract type affect performance metrics? Should we account for risk in the bid?

Finance –

  • What is the cost to hire, how quickly will we hire and what are the cash flow requirements?
  • What will be the impact to margins?
  • How do we deliver for maximum profits?

Leadership –

  • What does the win do for us in the marketplace?
  • Can we deliver operationally and do so profitably?
  • What is the impact to our culture that we need to recognize?

Shareholders –

  • What does this do to the company’s overall position within the industry/market?
  • What is the financial impact?

Absolutely everyone in an organization is impacted (directly or indirectly) by the pricing strategy that you employ on the bid. It goes without saying that to start, you’ve got to win. But the need to win MUST be tempered with the above impacts. Winning a poorly priced bid for headaches in execution is NOT worth it. Do not fall into the trap of “must win at any cost” mentality. It can wreck culture, margins and reputation.

For all the above reasons, we are extremely excited to announce our strategic pricing shop. We’ve got 10+ senior pricers that cover practically every agency, who have won billions. As we push towards fiscal year end, utilize professionals who can help you think through all of the above and win.