The "new normal" of government contracting is a tough adjustment. And yet, many contractors are thriving. Here's how they are winning the proposal process.
This post is based on a presentation delivered at the Veterans In Business Conference. The presentation was made by James K. McCarthy, Principal Owner and Technical Director, AOC Key Solutions, Inc., a federal contracting proposal and business development consulting firm. Since 1983, KSI has helped clients win over $130 billion in federal contracts.
At the beginning of Jim’s presentation he talked about “The New Normal” of government contacting, adding that “the storm clouds have formed.” While there has been some signs of life of late in various government market sectors, the market has not rebounded as fast or as robustly has some observers had hoped.
The reasons for the new normal include political gridlock, sequestration and fiscal cliffs, debt ceilings, continuing resolutions and government shutdowns. Coloring everything is political posturing and finger pointing, and a tendency for lawmakers to avoid long-term solutions and “kick the can down the road.”
How has this affected government contractors? Jim provided a painful list:
- RFPs Slowed to a Trickle
- Contract Awards Delayed
- Increasing Emphasis on Low Price
- Many Programs Stalled or Eliminated
- Layoffs triggered
- Protests Increasing
- Productivity Damaged
- Many Businesses Struggling to Hang On
- Workforce’ Morale Declining
- Joblessness Continues
- Corporations Restructuring
- Profits Declining
- Companies’ Contract Bases Shrinking
- Bid Rates on the Rise, Even as Downward Pressures Mount
- Competitive Pressures Spiking
- Rampant Uncertainty
And yet, some government contractors are winning new contracts and successfully growing their businesses.
How are they doing it? Jim broke down the 11 things that the most successful government contractors are doing in the business development process.
1. Prevent Pipeline “Creep”
To keep it manageable, review your opportunity pipeline early and often. Triage and eliminate unwelcome targets.
A contractor’s pipeline is its contract opportunity tracking system. Most contractors don’t have a problem with too few contract opportunities. Their problem is that they have too many. For every contract opportunity that they add to the pipeline, it is a good practice to delete another.
It is better to have fewer opportunities closely tracked than to have too many opportunities loosely monitored. The most successful contractors have strict contract selection criteria and they stick to them. No exceptions.
2. Have A Targeted Approach
Use a laser not a shotgun. Err on the side of caution and conservatism to select targets. Be practical.
Even with a manageable pipeline, contractors still need to have a targeted approach. A lot of new or less successful government contractors want to be all things to all people in order to hedge their bets. It rarely works.
Instead, they would be better served to select targets conservatively and cautiously. It is better to have two bids out in your expertise and delivery sweet spot than 15 bids that are all over the place.
3. Don’t Go It Alone
Starting out, consider teaming to increase your bandwidth and the range of acceptable opportunities.
Small or new contractors should find team mates or alliance partners with whom they have a business and cultural compatibility. Doing so spreads their risk, extends their experience and gives them a much deeper bench of talent.
Arguably, 15 years ago, many government agencies did not look upon teaming agreements favorably. The monolithic prime contractor was preferred. Some RFPs would state that they were not looking for joint ventures or teaming arrangements. They warned contractors that if they ignored this caution, they really had to make the case for why it was in the government’s interest..
Now, the paradigm has reversed itself – even the largest primes are teaming. Contractors are now pursuing more of a “best athlete” approach to form winning teams.
4. Assign Accountability
Appoint an opportunity advocate and a contrarian “devil’s advocate”. Then let them go at it.
Most contractors have business development, capture managers, proposal managers and others involved in preparing proposals. But the winning contractors are also appointing devil’s advocate contrarians.
The contrarians are not unprofessional irritants, but rather are there to make the proposal team prove their points, to ask questions, to challenge conventional wisdom, and to help the team avoid unsubstantiated claims. The devil’s advocate is not the enemy of the proposal effort; they are to “sharpen the sword” of the proposal team and to make sure every claim can be substantiated.
5. Avoid Pop-Up Opportunities
Then Ask: “Can I Win?” Not “Can I Perform.”
When an RFP is published, most contractors say to themselves, “yeah, we could do that work.” But they are not giving much thought to if they can actually win that work.
It happens all the time, with contractors big and small. The CEO comes in on Monday morning and logs on to FedBizOps, sees a new RFP and the next thing you know, everybody is chasing after that opportunity.
What they haven’t done is really think through their chances of actually winning. Have they ever met the customer? Does the customer know anything about the contractor? Does the contractor understand the customer’s problems and real issues (not just what is in the RFP)? Do they know anything about the incumbent, their performance and when the contract was last awarded?
If a contractor sees a published RFP and they’ve never met the customer and this is the first they’ve heard about the contract, they’re too late.
6. Handoff from Capture to Proposal
A good handoff between the capture manager and the proposal manager is like the artistry between the quarterback and the running back. Fumble the ball and the team takes a loss.
This is where most business development processes break down: between the capture manager and the proposal manager. In truth, a complete handoff should not happen.
Let’s say everything is working like it should - this is not a “pop up” RFP that came in over the transom. The capture manager has met the customer and has a solid knowledge base. He knows the price points, the hot buttons, the customer’s vision, etc.
The RFP is issued, a proposal manager is assigned and the capture manager moves on. Then, the proposal manager decides to take a fresh approach and change the direction originally recommended by the capture manager.
Bad idea. At that point the contractor loses the momentum built up by the capture manager.
To solve that disconnect that occurs all too often, the capture manager should stay involved in the proposal preparation as the opportunity advocate. Their primary role should be to serve on the review team, represent the customer’s perspective and push back when the proposal team goes off strategy.
7. Get It In Writing
Woe to the small business with no signed teaming agreement prior to proposal submission.
In the heat of battle, and often at the eleventh hour, teaming activity picks up. The prime approaches the subcontractors (or vice versa), there is a lot of excitement, vague promises and a handshake. At that point, some subcontractors will ask for a teaming agreement. They may or may not get one.
All too often nothing gets put in writing, but lots of assurances are given that once the contract is awarded, the subs will be given their share of the work. Then some time passes until the contract is awarded, and the sub shows up at the victory party and nobody knows who they are.
The winning proposal manager who made the handshake agreement has moved on to other proposals, or is no longer even working at the company. The program managers or operations people are now in charge of the awarded contract and they’ve already picked the subs for the new contract. The sub has then lost any leverage with the prime contractor.
With so much teaming going on with government contractors, written teaming agreements are now more important than ever. And the subs need to have a fully executed teaming agreement before proposal submission when they still have leverage. The streets are littered with small subcontractors that thought they had an agreement with a prime, but were instead left at the altar.
8. Find Real Discriminator(s)
The term "discriminator" is tossed around as if there are dozens of them. Most companies are fortunate if they have one true discriminator.
In government contracting, the term “discriminator” describes something about your company that is truly unique. For instance, it could be a proprietary process or a patent. Or something that you invented that has a measure of merit.
Having been in business for 20 years is not a discriminator. Nor is claiming to “understand” the agency who is issuing the contract, or the fact that a contractor has won a “best places to work” award or is ISO 9001 certified.
9. Perform Constructive Reviews
Had the Magna Carta been handed to a Red Team, the march towards democracy would have been set back several centuries.
In government contracting, the Red Team reviews the proposal and recommends, or better, directs, mid-course corrections. However, the process is broken.
The proposal team works long and hard on the proposal. Then the company brings in the Red Team – executives and subject matter experts to serve as “fresh eyes.” Invariably, the Red Team concludes that the proposal is fatally flawed and puts the whole effort into a tail spin. It’s more destructive than constructive.
Instead, consider a Red Team to be a “Win Team,” with instructions not to tear the proposal apart, but instead to strengthen it. Every problem must be accompanied by a recommended fix.
10. Listen to Your Customer
Try something different during customer visits. Instead of listening to your own voice, try listening to theirs. Instead of convincing them how smart you are, allow them to prove to you how smart they are.
Some companies place too much emphasis on hiring persuasive, smooth-talking business development people who make great presentations. While that doesn’t hurt, the really successful contractors focus first on hiring good listeners. If you can stop talking about your company and instead listen for the customer’s real problems, your winning percentage will increase. A good listener is worth their weight in gold.
11. Understand Your Customer
The best win strategy ever developed is to uncover a customer’s wants and needs. Then meet them.
This is the easiest to explain, but the most difficult for contractors to do. When preparing proposals, focus on the customer’s problems first, then your solution.
Winning contractors tend to deliver proposals that focus on solving the problems that are keeping the customer up at night. Very often, the customer will convey that the winning contractor “really understood us and what we needed.”