Government contract proposal preparation is time consuming and can be costly. Meeting the agency Request for Proposal (RFP) requirements with a responsive proposal can be well worth the effort if a winning strategy can be formulated. When considering submitting a proposal to a given government solicitation, conduct a bid/no bid exercise. By going through that process you will begin formulating your win strategy or you will discover that you should not bid this job for lack of such a strategy. The elements of the process are discussed below in the form of questions to ask yourself against topics for key consideration.Affirmative or non-affirmative answers to the topical questions and ability to fill in the blanks below will drive your decision to bid or not bid a solicitation.
Do you know this customer? Yes __ No ___
Does this customer know you? Yes___No ___
Do you have any idea of the available funding for which the customer has obtained authorization? Yes___No ____
Specify the marketing contacts which have been made with the customer thus far:
B. Supplies and Services:
Specify the supplies and services to be delivered in the prospective contract:
Line Item (s):
Are supplies and services in the RFP Statement of work a good match for what the company sells? Yes ___No ___
Is the RFP Statement of Work specific enough to identify risks? Yes____No ____
Is the RFP schedule specific enough to determine the delivery requirements? Yes____No____
Can the delivery schedule in the RFP be met? Yes ___No _____
Specify the delivery schedule for the prospective contract:
C. Contract Type/Value/Start/End Date:
Does the proposed contract type (FFP, CP, T&M, etc) suit the nature of the work? Yes___ No ___
Specify the contract type for this program: _______________.
Are there any unusual terms and conditions specified in the government RFP? Yes ____No___
Specify any unusual terms and conditions: ___________________________________________
What is the Rough Order of Magnitude (ROM) value of the prospective contract? $___________.
What is the anticipated start date of the contract? ________.
What is the anticipated end date of the contract? ________.
D. Company Strengths:
Is this prospective contract for effort in which the company has strong skills? Yes____No ____
Specify the strengths the company will utilize in meeting the product specification or statement of work:
E. Company Weaknesses:
Are there any company weaknesses in meeting the product specification or statement of work? Yes ___No ___
Specify any weaknesses for which the company must compensate and manage associated risks:
F. Teaming Arrangements (If any): Does company plan to team with other companies in the performance of the prospective contract? Yes ___No ___
Identify the other team member companies:
Will your company be a prime or a subcontractor? Prime___Subcontractor ____
Have NDA's and Teaming Agreements been executed? Yes____No ______
G. Competition: Is this a sole source set-aside procurement to your company? Yes____No____
If this is a competitive procurement, identify the prospective competition and their associated strengths/weaknesses:
H. Win Strategy:
Identify the proposal features and themes which will be utilized in the proposal as discriminators to win this program:
Cost: I. Proposal Budget:
Estimate the man hours and dollars for proposal labor, any travel expenses, shipping, packaging, samples and other expenses associated with preparing the proposal. The government does not reimburse the contractor for proposal preparation under the subsequent contract. Proposal expenses must be included in the cost center overhead or G&A and accounted for as marketing expense allocated across the cost center or the company.
Labor Hours __
Labor Dollars $______
Samples (if any) _______
If you can answer "YES" to at least 5 of the questions under paragraphs A through D above, it is likely you should bid this procurement.
If the answers to 7 of the 10 "YES" or "NO" questions under paragraphs A through D above are "NO" it is unlikely you should bid this procurement unless the answer to G is "YES". Even then, examine your answers and carefully review whether this business is suitable for your company.
If the answer to E is "YES", it is unlikely you will bid this procurement successfully unless the answer to G is "YES". Even then, determine how you will overcome the weaknesses you have identified in your company associated with doing this work before you decide to bid it.
Carefully compare the competitive analysis under Item G to the win statagy under H before you make your final decision.
INTRODUCTION: Your enterprise must market on several targeted government contracting fronts to be successful. Simply registering as a federal government contractor or acquiring a small business set aside designation does not mean that contracting officers will find you or that larger corporations will seek you out as a teaming partner. A GSA schedule or a multi-year IDIQ umbrella contract, purchase agreement or similar vehicle may look promising, but they are really no more than hunting licenses. The game must still be bagged (targeted sales of specific products or service projects to customers). The prudent small business will target agencies and teaming partners that best fit its products and services, positioning itself to acquire developing information on requirements and displaying capabilities by conveying early solutions to customer decision makers. This article will suggest techniques, approaches and tools to conduct a multi-front, targeted, requirements-driven, marketing campaign for small business federal government contracting. SELECT YOUR SMALL BUSINESS SET ASIDE DESIGNATIONS CAREFULLY Your small business designation by North American Industrial Classification System (NAICS) Codes should be thorough and as comprehensive as possible when you register at the "System for Award Management (SAM) web site. Make sure your registration has the maximum number of codes for which you qualify, since the whole federal procurement system rides on those codes. Insure the narrative description of your services is complete as well. Please see the following link for further information on registration: Federal Government Contracting Registration The sub-categories of small business set-aside certifications should be chosen carefully and based on your company ownership and specific market research into which categories the agency or prime contractor favors, what their small business contracting plan includes in the way of targets and what their track record has been in awarding contracts. Good information on awards can be gleaned from the federal web site on federal government spending at: USA Spending You can also check the SBA small business goaling report at: SBA Goaling Reports
For further details on each of the 7 small business set aside designations please see the following link: Small Business Set-aside Programs TARGET REQUIREMENTS EARLY Government agencies, like companies, have long range plans and budget cycles. Keep abreast with the latest developments in trade magazines and journals regarding government contracting trends within agencies to develop and market solutions for anticipated requirements. Monitor agency web sites and forecasts. Be constantly aware of the annual federal budgeting cycle, its development progress in the executive branch and its approval status in Congress. Agencies push to commit excess funding late in the fiscal year and at the same time forecast their next year needs for submittal to higher authorities. In the 1 October to September 30 fiscal year cycle, July, August and September are prime marketing periods. Watch FEDBIZOPPS for sources sought notifications, requests for industry comments on draft RFP's and similar early indications of programs taking shape which will later be advertised in full solicitation. Go after them early enough to market and get them set aside for your small business designation and influence the development of the project with constructive input creating a presence in the eyes of the customer and prospective teaming partners. MAKE PRUDENT BID/NO BID DECISIONS Develop a good fit in your bid/no bid decisions. The only thing worse than losing a contract bid is winning it and performing poorly, creating negative past performance notations on your record. Know what your company can do and cannot do. Acquire skilled personnel through contingent hire agreements or incumbent work forces as you grow and carefully choose what you bid. For information on bid/no bid decisions and proposal preparation please see the following link: Government Contracting Bid/No Bid and Proposal Preparation EXPLORE SERVICE CONTRACTING AND TEAMING Other than FAR Part 12 Commercial Contracting for off-the-shelf items, entry into federal government contracting for small business usually occurs through service contracting direct to an agency or teaming as a subcontractor with another firm for a major program. Even for commercial products, particularly new ones on the market, the best way to introduce your solution to a customer is to become involved in a service contact supporting the client's operations. With regard to larger government contracting corporations to whom you could subcontract, cover the waterfront. Find out what they are bidding and aggressively market a piece of the action as a small business. Find the locations for the largest government contractors nearest you and register at their supplier business sites. Everything they buy for their facilities, their personnel and their operations counts toward the small business goals required contractually of them by their enormous government contracts. Research their web sites and locate their small business liaison officers. Make appointments and visit them. While visiting, seek the names and titles of managers internal to their companies who manage prime contracts involving expertise your business can supply. Go after those managers. Form teaming agreements early with good industry partners and begin to develop a winning message to the customer while he is defining his program. The following article provides further details on teaming: Teaming in Small Business Contracting OBTAIN A GSA SCHEDULE The below link is an article on how to apply for and utilize a GSA schedule: Achieving and Utilizing A GSA Schedule There are 3 major challenges to going through the GSA schedule application process: 1. Finding an open solicitation that fits your product line 2. Establishing a good working relationship with the GSA Contracting Officer on the schedule solicitation and getting his/her assistance in working the system expediently. 3. Presenting viable, auditable cost history on what you have previously sold your products for to pass the cost/pricing audit portion of the process. Most companies continue to bid work to the government through FAR Part 12, Commercial Contracting procedures or other contract vehicles discussed this web site while their GSA schedule application is pending. Please examine this site for articles on teaming, marketing, IDIQ contracts, negotiations, subcontracting and many others. Remember there are thousands of companies out there going through the system, so you will have to be patient. Very few applicants get through it in any less than 6 months. A GSA Schedule is a very valuable item to achieve, but it takes time to do so and there are other forms of government contracting you can use while your application is in process. DEVELOP A DYNAMIC CAPABILITY STATEMENT A capability statement (CAPE) is an absolute necessity. It contains the specific information a contracting officer needs to place an order. This information includes such items as your D&B Number, your government registration numbers, your North American Industrial Classification System (NAICS) codes and the like. These items are selected or provided by you or determined by the system when you register your company for government contracting. Your electronic capability statement (CAPE) for government contracts should be short and hard-hitting. It should be 1or 2 pages and should highlight the salient points of your products and offerings, your personnel and your qualifications. Please see the following link for an example of a capability statement: Your Capability Statement WRITE RESPONSIVE PROPOSALS Writing a winning proposal is an art form. It takes practice and the more proposals you prepare and submit the more artful you will be. You will find yourself utilizing the same materials over again on successive proposals. Management approaches, personnel profiles, win strategies and other major components of a good submission will fill your library and extend your CAPE to specific solutions for specific customers. The following link contains guidance on writing effective proposals: Proposal Preparation SUMMARY Your reputation as a reputable performer in the small business federal government contracting community is important. Be selective and high performing. Agencies, past performance data bases and other companies will be observing you, recording your performance and passing the word along to others directly and indirectly. Then insure your web site, your capability statement and your marketing plans are maintained current alive and dynamically reflective of your successes as you pursue new business and carefully develop your library of past performance records by project with accessible profiles to use in your government proposals. Please see the following link on meeting the past performance requirements challenge in federal government contracting: The Past Performance Challenge
ABOUT THE AUTHOR:
Small to Feds is maintained by Ken Larson a Veteran of 2 tours - US Army Vietnam.
As a Volunteer Counselor, he assists many small businesses with their planning and operations processes.
Subsequent to his military service Ken spent over 30 years in federal government contract management and 10 years in small business consulting. He gets many inquiries from small companies wishing to enter or enhance their position in federal government contracting or grow their commercial enterprise. This site is intended to assist in answering those questions and others small businesses have in developing and operating a successful firm.
As the federal fiscal year draws to a close and the new year opens on 1 October, an astute contractor will have examined the funding status of all government contracts for risk.
Limitation of funds and funding exposure must be a vital topic for every government contractor.
THE FUNDING CHALLENGE Many federal contracts are funded incrementally, usually based on the government fiscal year that runs from 1 October to 30 September. Although the government may negotiate dollar price ceilings for cost plus and time and materials contracts or firm, fixed total price arrangements, the contracts themselves may be incrementally funded, particularly if they extend over multiple government fiscal years. A contract may contain negotiated prices or a cost ceiling but also specify an incremental funding value.
The contractor is required to inform the government when actual costs incurred plus obligations to suppliers or payroll on a specific contract reach certain thresholds of the current incremental funding specified in the contract (usually 80%). The government is then obligated to further fund the contract. In the event the contract is not funded further, the contractor has the right to stop work before he exceeds the incremental funding. Some contractors choose to operate on "risk," continuing to perform on a contract while exceeding the incremental funding in booked cost and obligations. The government is under no obligation to reimburse the contractor for invoiced amounts exceeding incremental funding. Nearing the end of a government fiscal year, a contractor may find delays in funding reaching all the way to congress. This situation must be managed with the government contracting officer. Limitation of Funds and Funding Exposure STOP WORK ORDER Contractors may receive stop work orders from agencies unless their contracts were fully funded in the previous fiscal year. The government reserves the right to de-obligate funding on contracts, which can effectively bring them to a halt.
Stop work orders are serious matters and require special handling to comply with government direction and manage the associated financial risk.
Upon receipt of a stop work order you have no guarantee of payment for any transaction date-stamped in your accounting system after the date of the stop work order (or the commencement date of a stop work order specified in a Contracting Officer's Letter).
Applicable charge numbers in the accounting system must be closed until the stop work order is lifted and any effected suppliers and subcontractors must be notified to do the same.
To the degree the government has made progress payments or has any other form of payment invested in a physical product to date it has ownership rights. If that is the case, treat the physical material work-in-process as government owned, store it as such without performing any more effort on it and await further disposition.
To the degree the government has not paid anything on the contract or delivery order they have no ownership rights to the physical product and you are free to complete it and sell it to another customer (commercial or government that has not stopped work). If the government recommences the order, quote a new price and delivery from ground zero.
At the bottom line a stop work is blunt and to the point. Treat it as if you will never hear from this customer again to manage the risk.
To the degree you do hear from the Contracting Officer again and he or she has the funding to recommence work, be prepared to submit a proposal for what it will take to start the effort and a realistic delivery schedule to complete it, but do not build any retroactive costs incurred during the stop work period into your logic and expect to bill them; they may not come to payment fruition.
Having a limitation of funds and funding exposure process in the company should be a standard part of doing business. A, shrinking, remaining funding level condition on incrementally funded contracts should trigger a risk analysis and government notification process throughout the year. The federal fiscal year-end brings an additional element of risk to the process with the annual budgeting, approval and appropriations process required by law.
Assuming a proposal to a government agency has an
acceptable technical solution and past performance and management factors that
convince the customer it is a viable candidate, then pricing may be the winning
element in the source selection equation.
The mechanics of government contract pricing have been
discussed previously at this site. The discussion relates how pricing should be
a natural outgrowth of the organization structure, market strategy, competitive
analysis, business system design and long range planning:
above article also explains how long and short term pricing factors should be
integrated with the management and technical elements of any given proposal and
that a total view of the business is best presented by integrating long-term
company strategy with short term proposal objectives.
The purpose of this
article is to augment the above discussion with tips on establishing and
maintaining credibility in pricing to a government customer.
Certified Cost or
Certified cost or
pricing data under the “Truth in Negotiations Act” (10 U.S.C. § 2306a) or TINA
statute is proposal pricing, which for procurements greater than $750,000, is certified by the contractor as accurate, complete
and current as of the date of agreement on
price. (Section 811 of the fiscal year 2018 NDAA includes a provision that increases the threshold up to $2,000,000).
The absence of a
certificate does not eliminate defective pricing liability.
underlined above is a key principle in relationships with the government and
its auditors. TINA influences a government auditor’s thinking and it is in the
back of the mind of every contract negotiator. They are taught and learn by
experience to look for TINA faults.
Thus, even if your
procurement does not meet the above threshold for TINA certification you should
price to establish a similar credibility with your customer, even though you
may not have to sign a TINA “Certificate of Current Cost or Pricing”. Doing so
is simply good risk management in business.
You may read more
about cost and pricing data and the negotiation process at the
negotiators and pricing analysts are preconditioned to utilize historical
data. The last or most favorable price offered a customer for a commercial
off-the- shelf product is strong support for what is currently being quoted.
This is particularly true of GSA Schedule negotiations, product updates or
repetitive buying situations.If you are
a commercial supplier, a quantity factor will also enter into play.In general, orders of higher quantity than historical pricing quantities undergo downward pricing pressure by the buyer unless
some other factor such as a non-recurring tooling charge, learning curve
interruption, obsolescent material or other upward factors can be offered as support for a higher unit price on a higher quantity buy.
Educate Your Auditor
An auditor who is
familiar with your forward pricing rates, your business system and your product
lines will understand your proposal cost and pricing data better than one who
has not been briefed on the big picture of your company business
operation.Take the time to conduct
briefings at that level and acquaint new government personnel with your
operations.Do not assume he or she has
read prior audit reports.They may have
done so but a face to face courtesy briefing is much more effective than
reading some other auditors view of a specific proposal.
This factor can be a
double edged sword, however. An auditor who knows the operation extremely well
can also spot deviations in cost and pricing data and require explanations for
anomalies in pricing based on observed trends.
Comprehensive Basis of Estimate (BOE)
A good BOE should
have the following principal attributes:
* Clear identification of the products, services, skills, materials and
performance factors required to complete the contract and material/subcontract
quotes, labor categories and skill sets to perform the effort.
* A description of the conditions under which the contractor will be required
to perform and any related environmental or location factors that affect the
hours or dollars quoted
* Specific references to product specifications that govern an acceptable
product or services performance outcome and delivery acceptance so that the
cost data has boundaries.
* A schedule for the contract that identifies discrete delivery dates for
products and specific start and end dates for supporting labor so that
escalation and price expiration are established.
* A precise description of government/customer furnished material or facilities
required and when it will be made available to the contractor to bound the
expectations of the client with respect to elements your company cannot or will
with Cost Accounting Standards (CAS) Requirements
businesses are generally required to meet modified CAS coverage for service
contracts. This requires consistency in the manner in which a small business
quotes a proposal and the manner in which costs and billings are accounted
after award.You can read about
these requirements at the following link:
Insure your proposal
contains no unallowable costs and that your direct labor as well
as your overhead and G&A rates are applied in accordance with your latest forward pricing agreement. If you do not have a forward pricing agreement, explain precisely how your rates were
developed from a CAS compliant business system perspective:
Guidelines as a Check to Prepare Support for the Profit Rate Quoted
Although policy in
FAR Part 215-404-4 states that contracting officers ….” do not perform a profit
analysis when assessing cost realism in competitive acquisitions”, it is wise
to understand the contracting officer and his representatives are indirectly
forming opinions of the risk to the contractor and the mix of cost elements in
the proposal. That opinion directly effects profit negotiations and judgments.
Contractors should be
aware that the Weighted Guidelines Method is mandatory for all negotiated
procurements except Cost-Plus Award Fee Contracts and exceptions as approved by
a higher authority. Contracting officers are to prepare their position using DD
Form 1547 with associated backup and file it at the conclusion of negotiations.
weighted guidelines method can assist in achieving a higher profit on a
negotiation because a contractor can present a position at the table that
logically supports the following elements required by FAR Part 215-404-4:
Read more regarding
the Weighted Guidelines Method at the following link:
A reputation for defective pricing
leads to accusations of waste fraud and abuse in government contracting and is
mostly about what a contractor knew regarding company prices at the time a bid
was negotiated and what the contractor did not disclose in the supporting data
regarding the likely cost outcome of the contract.
Actions taken by the government
and litigation resulting from defective pricing become part of the contractor
past performance record and must be disclosed during competition for other
Avoid defective pricing accusations by establishing credibility with your customer through consistent, regulatory-compliant, cost and pricing in your proposal submissions and negotiations.
Most enterprises in government contracting encounter the possibility of
submitting an unsolicited proposal. The perceived opportunity arises as a
result of observing a requirement that the company could uniquely fulfill, but
for which the government has yet to issue a formal solicitation.
These opportunities are normally large enough so they can't be sold
off a GSA schedule or an existing contract delivery order, and do not fall
under FAR Part 12, "Commercial Contracting”
CHALLENGES AND STRATEGY
product or service is not on the funding docket with the agency it does not
have a funding I.D. Your job is to get the technical and project personnel
enthused enough about it to carve out a niche in their program area and support
a funding request for it. They do so by to obtaining a solicitation I.D;
money and authorization to buy from you.
The key to
achieving the above is a good presentation revolving around your capability
statement but supplemented by a pitch that should emphasize specifically how
you understand the agency mission and that your offerings could further it.
should be to submit a hard hitting summary with a proposal in letter form,
protected with the standard proprietary markings, through the contracting
officer with whom you have already had discussions to the technical lead man in
the agency and request a meeting to make the full pitch in person.
WORK YOUR PROPOSAL IN STAGES
link is the Federal Acquisition Regulation (FAR) guidance on unsolicited proposals:
Be advised that
you need to assert your rights in technical data and software on anything you
give them that is product oriented because you have made an investment in it.
When they start putting money into its further development you find them
pressuring you for a deal on licensing and free use of it in exchange for
funding and orders for services. That is the normal course of events and it can
approach is to carefully locate a platform provider that could use your product
services and team with them on a larger scale, bundled program that may be
going to formal solicitation.
In either of
the above instances, carefully protect your idea using the tips in the below
You will note
that the FAR guidance specifies that cost and pricing data must be submitted so the proposal may be
evaluated. Naturally you must provide that ultimately, but it is
recommended you do not do so with your initial proposal submission.
Simply state you will be pleased discuss with the agency the scope in
terms of types and quantities of product and services, after which you will
price the result of their input for planning purposes, pending a formal solicitation with funding commitment.
If the agency
or a prime gets enthused, they will ask for a Rough Order of Magnitude (ROM)
estimate for planning and funding purposes on what your product or services may
cost. Be careful to make it conservative because those things get cast in
concrete and caveat any ROM with a written statement that your ROM is not a
formal commitment to a contract and that you will be pleased to commit with a
formal proposal from the government through a duly authorized contracting
officer under a funded solicitation.
I have had
clients that have even been requested by agencies to write a statement of work
for such a solicitation
fiscal year is a key driver in terms of available funding and getting it
earmarked. Keep in mind funding for a program using your idea or a platform
using it must fall within a funding cycle that begins 1 October, picks up heavily
in July and August and must conclude in September.
unsolicited proposals is a process:
An initial unsolicited proposal submission after focused marketing is the gateway
strong presentation to the customer in person is key.
Rough order of magnitude (ROM) pricing permits planning by the customer
A funded solicitation is a green light for a firm contract proposal.
5 A Formal proposal submission under a funded solicitation, committing to
negotiable price, schedule and delivery terms wins the contract.
addition to the articles linked above, please review the following 2
additional articles for guidance: