Final bid decision review

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Final bid decision review

Bid Decision Facilitation

The last major activity of the capture phase is the bid decision meeting. Ideally, this takes place on two occasions – a few months before the release of the final RFP and a day after the release of the RFP. However, today’s fast turnaround government procurements often do not allow sufficient time for two meetings. The capture manager is responsible for scheduling this meeting. Participants should include:

  • Business unit manager
  • Finance and contracts
  • Recruiting staff, if relevant
  • Program director
  • Capture and/or product manager
  • BD lead
  • Proposal manager
  • Pricing Manager

For company priority leads, capture meetings might also include a company executive, Chief Operations Officer (COO) and Chief Financial Officer (CFO).

The Capture Manager presents the capture plan at this meeting. The BD lead presents the slides for his/her section including the competitor’s analysis, SWOT analysis, and proposed themes and discriminators. The Capture Manager then provides the review team with a copy of the bid decision matrix (see following Table) and leads a discussion on each of the bid decision elements. The numerical result of this analysis is referred to as the Probability of Win or Pwin.

Bid Decision Matrix Section 1

Bid Decision Matrix Section 2

COMPANY BID DECISION MATRIX (Word document)

After making any adjustments to the criteria scoring, a final bid decision is made by the business unit manager with input from all attendees. A company executive often has final bid decision approval authority when bid and proposal expenditures will exceed a certain percentage of total company allocated business development budget and on all firm fixed price bids that exceed a certain value.

Some of the reasons a decision might be made to stop pursuing a lead are:

  • BD funds are not available to pursue the bid
  • Can’t get the right companies for the team
  • No available/acceptable Project Manager candidate or other key personnel candidates
  • Insufficient proposal resources
  • Strongly positioned low cost bidder emerges
  • Unacceptable contract terms and conditions
  • Key client relationships have not been established

It is important to consider the probability of the bid both for the purpose of maintaining a balanced bid portfolio and understanding the risks associated with bidding a specific opportunity. The following VERY ROUGH general guidelines can be used to assign a win probability:

  • Blind bid – new market: 1-5%
  • Blind bid – established market (current client): 10-25%
  • Well positioned bid – new market (new client): 20-30%
  • Well positioned bid – established market (current client): 25-50%
  • Re-compete with satisfied client: 25% to 75%
  • Sole source to company or recent win contract growth: 50 – 90%
  • Contracts and pricing

These guidelines consider the entire team’s win probability. Whether your company is a prime or subcontractor, these guidelines should be considered, even for re-competes in which you or your prime contractor are an incumbent. You can consider yourself in a good position for a Pwin if the number of credible competitors is only one or two companies; however, as the number of credible bidders rises, your Pwin will most likely decline.

The contracts and finance departments are responsible for supporting the following activities:

  • RFP analysis
  • Proposal support and procurement strategies
  • Proposal support when subcontractors are involved
  • Subcontractor proposal evaluation
  • Preparation of “cost volume” terms and conditions
  • Negotiation – prices, terms and conditions
  • Post award contract administration
  • Program management support
  • Teaming agreements (as prime and subcontractor), non-disclosure agreements, etc.
  • Business advice and guidance related to contract terms
  • Subcontract administration
  • Any required government Contractor Purchasing System Reviews

One of the most important aspects of contracting for all company managers to be aware of is the relative risk of different contract types. The major variable is the amount of financial responsibility the contractor assumes and the potential financial reward. Your company should have a contracts expert and a finance expert available who understands each of these contract types as well as the Federal Acquisition Regulations (FAR). The list below identifies major contract types in ascending order of financial reward and descending order of risk:

  • Cost-Plus Fixed Fee (lowest risk and lowest potential financial reward)
  • Cost-Plus Award Fee
  • Cost-Plus Incentive Fee
  • Time and Materials
  • Cost-Plus with fixed unit rates
  • Firm-Fixed Price level of effort
  • Fixed-Price deliverable (highest risk and highest potential financial reward)

Before and during a project, it is crucial that everyone on the capture, proposal and project team:

  • READ the solicitation
  • WRITE proposals carefully
  • READ the contract
  • INTEGRATE the proposal and the contract
  • CONSULT company subject matter experts

– Mike Lisagor

By | 2019-02-21T07:36:56+00:00 April 9th, 2015|Final Bid Review, post, Uncategorized|0 Comments