When opportunity knocks, we are supposed to answer the door. Solicitations are very much like opportunities which lead to business growth in both revenue and reputation. But should we answer every knock at our door? While it may be tempting to respond to every solicitation, this may not be a practical option. There are thousands of new opportunities daily. Responses should be unique to solicitation, which requires time and effort. Depending on the complexity of the solicitation a responsive proposal can take anywhere from days to weeks, or even months to complete. Conducting a Bid/No Bid analysis will help determine if the projected cost of building a response makes sense for a particular solicitation.
What is a Solicitation?
A solicitation is the act of asking for or trying to obtain something from someone. In the government world, solicitations are a way of acquiring goods and services for various agencies. This could be anything from boots for soldiers to IT services at a local hospital. Solicitations detail the government’s requirements, terms and conditions, and the evaluation criteria used to award a contract. Solicitations also come in various forms and response times can vary depending on the details listed within it.
Types of Solicitations
- RFP-Request for Proposal: Solicitation for a specific project where the vendor is evaluated on various criteria such as quality, technical ability, and strategic approach. The winning bid is awarded to the company who can best meet the deliverables.
- RFQ-Request for Quotation: Used to obtain price, cost, delivery, and related information from suppliers. The government uses simplified acquisition measures to determine who wins the award.
- IFB- Invitation for Bids: Document eliciting quotes for goods and services. Typically, the lowest bid wins.
- RFI-Request for Information: A common business process used to collect information on a vendor, their products/services, suppliers, and capabilities.
For more information on Solicitations see our Course: Decoding Government Solicitations for the Win
What is a Bid?
Simply, a bid is an offer. If you have ever attended an auction, people bid on items of interest and usually the person with the highest bid is the winner. The winner is obligated to pay the price they bid for, and then that item is now theirs. Similarly, a bid in the government realm is an offer to obtain a contract. However, these bids can be more than a dollar amount and usually detail how, what, when, and where goods and services will be provided. The company that wins the bid must do exactly what was specified in the offer they proposed.
Why Bid?
Making a good bid decision can be critical to your business’s success. Responding to every bid request is not realistic and using a generic bid proposal template won’t get you far. Bids should be tailored to the solicitation and address all the needs of the requesting agency. Ideally, you would want to bid on the solicitation that gives you the best chance of winning and provide a good return on investment.
A solicitation may arise that seems perfect, but after more research may not be in the best interest of the company. Consider if you have past performance that is similar to this new opportunity and whether you were successful. You might even have a customer asking you to bid on their request. Don’t take that as a sure win. Sometimes businesses are asked to submit a bid for the sake of creating competition. If it seems like a hard win, it probably is. The best thing to do is question your abilities, motives, resources, personnel, qualifications and uncertainties. Making an informed decision will put you and your company in the best position to create a competitive bid.
Decision Gates
A Bid/No Bid Analysis is a process of helping your company decide whether or not to bid on a solicitation. With so many opportunities becoming available each day, it can seem impossible to find the one that meets your capabilities and growth objectives. However, having a set process in place to weed out low probability opportunities can help ensure that your resources are being used wisely.
The Bid/No Bid decision is a process rather than a one-time decision. An analysis should be reviewed at each step of the solicitation process. The more information you have, the better you will be at making an informed decision. The following checkpoints also referred to as decision gates that provide key decision points in the solicitation process.
- Interest Decision– Once you have reviewed the solicitation, determine what the deliverables and qualifications are. Ask yourself if your company is even capable of meeting the needs and requirements set forth in the solicitation. Ask questions to the requesting agency or customer if you need any clarifications about the solicitation. Have as much information as possible to decide whether to pursue further. Don’t waste resources bidding on something you are unsure of.
- Pursuit Decision-When vying for a contract, gathering knowledge and building connections can have long lasting benefits. Some of this should be considered before a solicitation. If the first time you hear about a solicitation is when it’s published, then you are already late to the game. Strong competitors get their foot in the door ahead of time. They are aware of the needs of the customer and are eager to measure up. They have built rapport in various ways and may have contacts on the inside. If there are doubts about capturing the bid or maybe you aren’t even on their radar, then this solicitation may not be a good fit.
- Preliminary Decision– Determine your PWin or Probability of Winning. Your Pwin is determined by considering your win themes, past performance, key personnel, and other discriminators. Identify any gaps or risks and determine how and when you can overcome them. Know your competitors and how your bid stacks up against theirs. Below is an example of a PWin Matrix. This probability matrix is used to remove subjectivity and makes prioritization easier. Reconsider your bid decision if your PWin is low.
- Bid Decision– Consider everything you have done up to this point to capture the win. If you are still feeling confident and there is still time left before the solicitation closes, then now is the time to open that door and pursue the opportunity.
When to Bid with a Low PWin
While this goes against everything previously discussed, there is a time to bid even though you are guaranteed to lose. First, consider who the solicitation is for. Is this an agency that you have been pursuing for some time? Second, consider the deliverables required in the bid. Is this a close match to what your business offers? And finally consider if you have the available resources. Can you afford to spend time and money pursuing a guaranteed loss without huge implications? If you can say yes to these answers, then bidding and losing can have beneficial outcomes. Once a bid has been selected, debriefings (click to get more information on debriefing strategies) will be held for all those who did not win. You will be informed why your offer was not selected. Take note of every detail and use the information provided in these sessions to improve future bids and work performance. This is also a great way to jumpstart a relationship with the customer and begin gathering as much intelligence as possible for other opportunities in the organization. This should help in your next bidding decision and in writing your next proposal response.
To bid or not to bid? That is the question you must ask yourself the next time opportunity knocks. The key to winning a bid lies within the preparations you make before a solicitation is released. Remember to start building connections, gathering intelligence, and focusing on the areas that will aide in improving your PWin. The more you go through the bid/no bid analysis the better you will become at obtaining higher quality opportunities while reducing the need to bid on everything. Who knows, the next knock could be the opportunity you were waiting for.
Coley GCS has successfully assisted companies for over 20 years with navigating the complex world of Federal contracting. Coley also powers the FedMap Community, a useful tool that helps companies grow government contracting sales. The membership to the FedMap Community at https://www.fedmap.us/ is free and enables contractors to Learn, Network, and Thrive in the government contracts market.
FedMap also offers one-to-one coaching by experienced Government Contracting experts to demystify Government contracting and help you develop winning strategies. Our coaches have an average of 30 years’ experience in winning and managing government contracts. Find out more at: https://www.fedmap.us/one-to-one-coaching.
0 Comments