On a given bid, typically you may not have a large number of strong competitors seeking the same work, but at least some of the competitors you do have will be smart, entrepreneurial, and resourceful. If you win, the margin by which you beat them generally will not be large. This means that to beat them you must fully understand the customer’s needs, and fully provide for them, and you must do it in a way that is highly visible and cost effective.
Your customers generally are astute and knowledgeable, and are able independently to assess the quality of your offerings and the prices you ask for your product or services. Still, they are not immune from mistake, and you must be adept at guiding them away from mistakes that might damage them and perhaps you as well.
You perceive that your competitors get harder to beat all of the time, and you are concerned that your win / loss ratio is suffering or will suffer. You are looking for help to improve your chances of winning, without having to bid so low that you are likely to lose money.
If all or most of the above is true of you, this book was written to help you. The book distills in one place expertise and wisdom from several fields of knowledge that bear on the problem of designing and bidding to win in a market where design and cost both matter. It points a way for you to proceed in the direction of increased win probability, and a better chance of long-term survival.
This book does not pretend to be a silver bullet that will slay all of your dragons and make you a sure winner on your next project, and on every project after that. In the real world, there is no such thing as a silver bullet; there is only continual striving to do better.
This book certainly cannot overcome organizational sloth or ineptitude. Only eventual failure, or a new broom sweeping clean, can do that.
Finally, this book cannot make you a successful bidder in an area of expertise where your team has little experience or is outclassed by one or more serious competitors. Hopefully, you are able to recognize those situations and avoid them. Or, you are willing to invest the time and money to rise to your competitors’ level.
If we offer no silver bullet, just how do we help? What we offer is useful ideas integrated into a consistent strategy, which if followed rigorously should result in your winning at least your share of the available work. The strategy is neither magical nor mysterious. But it is coherent and logical. As you progress through this book, we hope and believe that you will agree that it makes sense.
You may fairly ask: What if your competitors follow this or a similar win strategy? Here is our answer:
What are our prescriptions for successful bidding? In a nutshell, you must understand and act upon:
As a prerequisite to doing these things, you should have early and frequent contact with the customer. You must have the ability to:
Exhibit P-2—Pursuit Cycle
Moreover, you must be willing to:
The book discusses all of these subjects in detail. It is organized into six major sections with a total of 18 chapters, plus five appendices.
Most businesses are cyclic in some sense. Retailers regularly have a big push at Christmas and smaller flurries of activity at other times. The demand for gasoline slows in winter months, but the demand for fuel oil picks up. Machine tool manufacture typically follows a larger business cycle related to economic booms and recessions. Some types of projects are affected by these various cycles, but companies that have substantial “propose / bid” activity have a unique type of cycle of their own.
We might call it the “project cycle.” It may not be tied to the calendar at all, but it is nevertheless a cycle of repeated activities. It begins with learning of a project opportunity. If the project is ultimately lost in competition, it ends with the customer’s rejection of the contractor’s bid. If the project is won, it ends with completion and acceptance of the work by the customer. Small contractors may have only one project cycle ongoing at a time. Some very large contractors may have hundreds of projects ongoing at the same time, typically a few large, and many small.
In this book we have some interest in the overall project cycle, and it will be discussed. But our main focus is a subset of the project cycle.
We call it the pursuit cycle.
While excellent execution of an awarded project is certainly something contractors should be concerned about, excellent execution in the pursuit cycle is something they must be concerned about; else they will not long survive. What is the pursuit cycle?
As its name implies, the pursuit cycle is the part of the project that extends from first hint of a project opportunity to acquisition of the project by the contractor (the win scenario) or rejection of the contractor’s proposal (the loss scenario). The ratio of wins to losses typically is strongly correlated with the financial health of a contractor. Lose too often, and a contractor could be forced out of business.
We call it the pursuit “cycle” in this book, rather than just the pursuit “phase,” because we believe that the activities that lead to a competitive win probability must be cyclical in nature. A cyclical activity can lead to much desired continuous improvement of the win probability, while a one-time linear activity by definition cannot.
Exhibit P-1 illustrates the pursuit cycle. In this preface we will convey only an elementary notion of what each sub-activity is about. Later chapters will discuss them in much more detail.
The pursuit cycle activities are not necessarily repeated in precisely the order shown in Exhibit P-1. Typically, the order is adapted to the flow of information and the necessities of the proposal situation. Frequently, more than one of the activities will be ongoing at a particular point in time.
Here are brief descriptions of the activities shown in Exhibit P-1. They will be the main focus of this book, each in its own section.
I. Get Off to the Right Start—this section discusses “early start” business practices and promotes better understanding of who the customer really is. Customers do not always speak with one voice.
II. Know What Your Customer Wants— customers have particular goals and values. You need to understand them. You may be able to influence them and help your customer avoid mistakes to your mutual benefit.
III. Know What Your Customer Is Willing to Spend— the better you understand your customer’s spending habits and perceptions of appropriate costs, the more likely you are to be a successful bidder. This section focuses on helping you identify the competitive bidding range.
IV. Design Your Project— in a project, you do both programmatic design and product design. Your customer is certainly interested in what kind of product you intend to design and eventually build for him. Will it meet his needs? Is it affordable? But your customer may also be highly concerned about your programmatic design. How will the project be managed? Where and by whom will the work be done? What kind of management tools will be used? How will you manage project risks? These important issues are thoroughly discussed .
V. Bulletproof Your Proposal— your proposal will be “shot at” in your competitor’s proposals and may be criticized by members of your customer’s team. You must carefully analyze what your critics are likely to say and do and counter it to the extent you can. One of the toughest things to do is to choose the best bid amount. This section discusses the Best Bid model which can help you make that decision, keeping the right balance between bidding too high and bidding dangerously low. Also discussed are proposal content and critiquing the proposal .
VI. For the Future— Thoughts on planning between proposals. More thoughts on balancing profitability and stability .
We also provide five appendices. They contain supplemental information that can be helpful in a successful pursuit. They are:
Appendix A — Be All that You Can Be. This appendix discusses ways the project team can be as efficient as it can possibly be.
Appendix B — Maintaining Cost Discipline. Cost discipline is increasingly important to a well managed project. This appendix contains a thorough treatment of the subject.
Appendix C — Miscellaneous Tools. This appendix discusses several very practical tools that can help make the pursuit more effective.
Appendix D — Cost Estimating Checklist. All of your hard proposal work may be for naught if your cost estimate for performing the work is seriously flawed. This appendix contains a checklist that you can (and should) use to guard against both under and over estimates of cost.
Appendix E --- Risk Identification Checklists.
Most chapters of this book contain review questions. They are designed to stimulate thinking about issues surrounding the pursuit process. Most of the questions don’t have just one set answer. The best answer may depend on your particular circumstances.