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What is Price to Win?

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Price to Win (PTW) is one of those phrases GovCon folks throw around without really understanding what it means. Some people hear the phrase and think there’s a winning number that guarantees them landing the next big contract if they find it. The truth is a little more complicated, but this guide will help you understand and leverage Price to Win strategies to solve your pricing problems and land federal contracts.

What Does Price to Win Mean?

PTW is a strategy for setting your price in a contract bid based on analyzing your competitors’ capabilities and evaluated prices. It aims to position your bid to win by offering better value for money than the competition.

In contrast to top-down Price to Compete analysis, PTW is a bottom-up build based on the draft and final Request for Proposal (RFP) documents. As soon as the draft RFP is out, PTW analysis starts from a Competitive Analysis to model rival solutions, what they’ll cost and how those contractors will price them.

PTW analysis should involve a comparison of labor categories, location and other components your competitors are pricing. The end result is the Total Evaluated Price (TEP). Along with the TEP, a thorough PTW analysis will recommend specific strategies from competitors to incorporate into your own pricing strategy.

How Does PTW Help Land Federal Contracts?

PTW helps GovCons land federal contracts by solving pricing problems and translating a Competitive Analysis into pricing to beat competing bids.

If you’ve been vying for contracts for a while, you’ve probably experienced pricing problems like:

  • You’ve been losing proposals because of the pricing factors involved.
  • Your technical and other volumes have been kicking down the door by getting excellent/good ratings, yet no wins.

Underneath these pricing problems is an analysis gap. PTW solves your pricing problems by filling that opening.

You achieve a winning price by thoroughly analyzing competition, acquisition trends, budgets, price and capabilities tradeoffs. You then balance applying your findings from this analysis with accurate cost proposal development. This process is essentially the concept of “Price to Win.”

GovCons, who leverage PTW to inform pricing decisions, have a major advantage over those who leave this robust analysis out of their cost proposal development process.

PTW Strategy Tips for GovCons

A Price to Win strategy’s result depends on how well you execute it. Here are four tips to help you price to win government contracts:

  • Start early: A PTW process should begin the minute you identify an opportunity, and you should integrate it into your bid/no bid decision.
  • Stay ahead: Understand the competitive landscape when the opportunity is announced and forecast what it’s likely to be by the time the final Request for Proposal (RFP) drops — this can be quite a long time, up to a year or two. Keep an eye on the ball because our industry’s landscape shifts constantly. A competitor may become your teammate, or a teammate might suddenly become a competitor if there is merger and acquisitions (M&A) activity.
  • Sustain profitability: Armed with the data from your PTW analysis, weigh the likelihood of winning with a certain price against the reward if you do win. Look for a sweet spot between competitive pricing and worthwhile profits. Sometimes, the best conclusion to draw from a PTW analysis is to pass on the contract and focus on a better one.
  • Source expertise: Hiring industry experts provides the lens needed for a robust view of the competition. A GovCon pricing expert will have a finger on the market’s pulse and access to data your internal team lacks. It’s worth investing in these experts to capture your PTW market analysis with an unbiased view.

Contact BOOST LLC for Strategic Pricing Solutions

Winning a federal contract bid demands more than the right technical solution — it requires pricing that fits the project budget and beats out your competitors. On a competitive landscape where rewards are high and wrong pricing calls leave you empty-handed, GovCons must leverage superior analysis for superior results. BOOST is your strategic pricing advantage for your next contract bid.

The dedicated pricing team at BOOST has the experience, expertise and resources you need to gain a competitive pricing advantage. Our Price to Win consulting service for GovCons will capture the accurate analysis you need to price your bid for the win. Our seasoned pricing buffs will help you gain key pricing insights and incorporate them into winning cost volumes.

Contact BOOST to schedule an appointment and give your bid the pricing edge it needs.

Proposal Hell

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Government Contract Proposal Season

As we wind down the major proposal season in GovCon, it is time to take a step back and reflect on our current process.  Did it work?  Do you feel like it was as well executed as it should be?  Did you have a plan for what you bid on and did it align with your strategy for your company?  Did you go after ‘just anything or everything’ to see what stuck on the wall?

Government Contract Proposal Strategies

As government contracting organizations mature, their proposal strategy evolves.  Let’s face it, in the beginning, a GovCon is just happy to be invited to the dance, even as a sub.  So, we’ll bid on blue birds; we’ll stretch our rates, our margins, our past performance and occasionally our credibility.  How many go/no-go meetings have you been in where the phase “loss-leader” or just enough for “past performance” are mentioned?  The theory being that you’ll grow the business organically, you’ll have a leg up on the competition for any additional scope/work, you’ll have a past performance that you can cite in other bids and the idea that it adds to the direct labor base.

Let us handle your contract proposals 

Too many times, this “win” becomes the anchor of the organization.  All of management’s time is spent on the contract, which turns into a dog that no one wants to walk.  No raises are accounted for, the indirect rates won’t allow any extra costs, recruiting and retention become a nightmare.  Generally, it takes just one of these contracts to learn the hard lesson on being strategic in what you pursue.

Government contracting organizations eventually evolve into work that fits more in their niche.  The struggle then is that they become very comfortable with their current clients and niche.  Then more questions arise. Do you continue to push your organization to go after new clients and additional skill sets?  Do you suffer from incumbent-itis?  How do you motivate your team to approach the re-compete with the same vigor as new work, when quite frankly, all we want to do is dust off the old bid and update it?

In summary, everyone is essentially in proposal hell, no matter where you are in the lifecycle.  The important piece is realizing it, addressing the issues and turning them into an advantage over your competition.  What can you do to be better or to be heard in a crowded field?

If you’re seeking GovCon proposal assistance or back-office support visit BOOST LLC or send an email to Stephanie Alexander at [email protected].

Post-Proposal | After Action Review

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Does your company know what happened?

The proposal was finally submitted, the team has finally gotten a night’s rest, (some having nightmares of missed compliance items and some cherishing the eventual win party)!  Either way, a lot of mental focus is disbanded after a successful proposal submission.  One of the things that many companies benefit from, but fail to do often, is an After Action Review or Lessons Learned review.  We recommend doing this often, and quickly, after the proposal is submitted.  It doesn’t have to be conducted in a formal manner, with meetings or papers.  After action reviews can be a simple non-formal format such as a survey or questionnaire to the key players of the proposal.  After action reviews should involve your proposal manager, your key subcontractors, any consultants you may have had, and most importantly your pricing lead.  Most companies forget to include lessons learned from a pricing/cost volume preparation perspective.  There are many lessons about after action reviews for GovCons to be learned on this front. Here are some basic questions to get you started:

1. Were you able to coordinate and manage your subcontractor pricing and its impacts to your proposal in a timely fashion? 

2. Was your C-level team allowed to make last-minute changes (hint: Gold team is NOT meant for changing levers such as fee/teaming ratios/labor rates) that absolutely caused a ripple effect and chaos across multiple volumes?

3. Was there enough emphasis on compliance in the Cost volume?

4. Was there enough time built in for cause and effect from pricing to other volumes?

5. Did you prepare with enough data/intelligence when it comes to deciding on wrap rates/labor rates?

 

Once the proposal is submitted it’s too late to make changes (unless errors are identified that you must inform the government about, but that’s a topic for another day).  What this does is get your proposal team ready to bid smartly and accurately for the next ones. After action reviews are all about sharpening your team, making them more efficient for your next contract Making the same mistakes is a fool’s errand in this business, it’s costly and redundant.  Don’t be that team! BOOST can help you to conduct After Action Reviews or even better, get your pricing on the right track the first time. Let’s talk: [email protected]

Audit Files, How Important Are They?

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Well, the proposal was submitted, the “all-nighters” are done, the proposal team has celebrated either with a big happy hour or a 48-hour night/day of sleep, and all is well.  It seems that way at first until the pricing specialist wakes up in the middle of the night dreaming of errors and mistakes or compliance issues (I can only speak about myself, I’m sure the rest of the proposal team has the same sort of nightmares!).  One way to avoid having post-proposal-submission-anxiety is to document and save records of everything in your pricing files.  This is critical not only for your mental health, but for the corporate audit risk as well.  DCAA can and will come back at any point to conduct audits of how the proposal rates were developed.  Here are some quick tips to be prepared and to alleviate any post-proposal submission stress (I’ve named this condition PPSS):

  1. Create an Audit folder – archive this as a part of your proposal files. Create a substructure in which you can store documents related to inputs, version control history, emails, etc.
  2. Document, document, document – any email with inputs from the proposal or management team, such as basis of estimates, changes to management plans, hours, staffing or teammates. Anything that documents the direction of the proposal, why something changed, when it changed, and the reasoning.
  3. Save all emails – no shortcuts
  4. Save all inputs from the Finance, Accounting, HR teams – These are critical, because they will be the back up required to demonstrate how your rates and assumptions were developed.
  5. Save all versions of your cost models – This way you’re able to track and see iterative changes related to inputs or assumptions, and amendments related to the RFP.
  6. Save all versions of your cost volume – Ensure track changes are on, in all the draft versions, and save the final submitted versions (gold team), in a separate folder. You need to be able to trace if and how changes were made.  This is not just about CYA, it’s about accountability. If something changed and it didn’t sync up with the technical volumes, you may be able to figure out why and remedy it if the government wants clarifications and corrections after submission.
  7. Have a dedicated folder – It is best practice to create and save this folder as you develop the proposal, but it’s OK if you don’t get to it until after submission. Just make sure it’s done either way!

 

Overall, be smart, save all the relevant documents, versions and files in an archive folder.  Don’t alter the files, lock them down and only give access to parties that require it.  This is your audit folder, this should provide all the clarifications and corrections to DCAA, should they audit your proposal.  This also provides a good way to review any proposal related mistakes or for a regular after-action review.  This will also help you (yes, you the Pricing team), get a good night’s rest because you’ll have all the history saved and be able to check on mistakes or errors or compliance issues that might be keeping you up.  You can only prevent mistakes in the future if you know what happened.  This audit file can also be used during a re-compete to pull historical data or historical assumptions that might form the pricing strategy for your new bid.  Basically, always prepare and keep an audit folder after your proposal is submitted.

 

Proposals are challenging, but the hard work makes the win so much sweeter. Let BOOST LLC help you with your pricing strategy. Email [email protected] and schedule a consultation today.

GovCon Lifecycle: Purgatory to Paradise

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The second govmates institute, GovCon Lifecycle: Purgatory to Paradise met at the Northrup Grumman location in McLean, VA. In an authentic meeting-of-the-minds, industry experts discussed topics pertinent to growing the local govcon footprint.

Highlights from the institute include:

Purgatory: That Awful Time Between Submission and Award

  • BAFO’s, How to respond to government requests, FAR compliance, “Gotcha’s”“Proposals are rarely won at submission, but they are lost. If you get an EN – correct, don’t defend.”
    Barry Landew – Wolf Den    “To mechanically lower your price during ENs make sure you revisit trends to see where you can adjust.”
    Avantika Singh

30-60 Day Transition & Ramp-Up

  • Recruiting & Operations (Transition planning, Re-badging, Quality Planning, Customer interaction) –
    “Be sure to stay in touch with your key personnel and others that you bid after you submit your bid.  Fostering this relationship will cut down on your recruiting time.”
    Mary Holmes – BOOST
  • Contracts (Sub-K’s, Negotiations) –
    “Best advice that is not only the most obvious but the most overlooked – did you read the entire contract award and do you know what you are signed up for?  Make sure everyone on the team is aware.”
    Amanda Tyson – BOOST
  • Accounting (Accounting system set-up, Billing requirements, Types of contracts)
    “Make sure you get the labor category paperwork done up front because you could lose money if they don’t meet the qualifications.”
    Giacomo Apadula –  BDO

Opportunities in Loudoun County

  • “Insider baseball on AWS is coming to Northern Virginia. There is still a ways to go, there will be another downselect based on sites.”
    Steven Hargan – Loudoun Economic Development

Now That You’ve Won – How Do You Pay for It?

  • Have your contracts folks review the financing document.  It’s a contractual document – CEOs make sure you know what you’re getting into and completely understand the terms.“Be careful and read the fine print to make sure you’re actually getting the rate you think you’re getting from your financial providers.”
    Matt Stavish

Capture & Business Development for FY2019

  • Be strategic about your capture process – make sure it’s a rolling 36-month pipeline.
  • Focus on both getting onto some of the larger IDIQs (hello Oasis!  GSA Schedule 70!) and on agencies that award independently – who buys from you? 
  • Yes, there seems to be less direct sole sourcing opportunities and more competitively bid set-aside work for 8a’s.
    Kim Pack, Wolf Den

Join govmates to be updated on future opportunities for continuing education and targeted matchmaking! 

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.

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.

Lucky or Good?

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Editor’s Note: This Article Has Been Updated December 5, 2022

As we head into the second half of the government fiscal year, do you find yourself looking at contractors who are on a winning streak and asking, “why do they keep winning?”  What is the secret sauce?  They don’t (at least from an outsider’s perspective) seem to be doing anything differently to gain GovCon success.  Their service offerings aren’t different than others.  They are winning with new clients, so it can’t be incumbent insider intel.  They aren’t the cheapest on the block, so they aren’t low-balling their bids to buy their way in.  Are they just lucky?  Or is it well deserved?

For those of us who work in GovCon all day, every day, we start to pick up on who will be successful and who will die on the vine.  Those that are winning have some of the following qualities:

  • Some differentiator in their service offering.  It doesn’t matter how loosely held that differentiator is.  I can go on for hours about lack of differentiation within GovCon and how “your people are the best athletes on the field” is NOT a differentiator. Those that win have glommed onto something they can promote as different, with this value being directly responsible for their GovCon success.
  • Proposal machines.  These folks know the extra work required for going after some of these bids.  They successfully shift or delegate their work to others to allow them to ramp up on proposal work.  This is not necessarily the same as having a proposal shop.  It just means they know how to prioritize and delegate and have put in the mechanisms to do so, gaining more opportunities for GovCon success.
  • Competitive rates.  Not necessarily low-ball rates, but something that is in line with their customers budgets, their main competition and the infrastructure that allows them to profit.  If you are winning often, you do NOT have to “buy your way in” on a new customer.
  • Recruiting machines.  They’ve got great candidates that they can flip to employees quickly.  Their resumes sing.  They have been working these candidates since they first smelled the pre-solicitation, as having the right people tends to lead to GovCon success.
  • Competitive Intel.  Someone there has been working the opportunity and the customer for months, if not years.  From the outside, this win may look like a total bluebird, but someone has been working it hard, quietly.
    ​

With a few wins, the leadership strives for more, recruiters have an easier sell to candidates, employee referrals go up, teaming partners start to line up.  There is something about being a winner in this town that makes folks want to work for or with the company. Your GovCon’s success hinges on this continued growth. Throw in a little luck and timing, and that’s how you get the GovCon Swagger.  At least until the re-compete.
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While you may need to define some of these pieces for yourself, BOOST can assist with the prioritization and delegation of your most important tasks. We specialize in GovCon accounting, contracts, HR and/or recruiting, key pillars of GovCon success and growth. Pick one, two or a combination of all four to free up your work time to become a proposal machine. Send an email to [email protected] and let’s discuss how you can get started.