Making an Astute Bid/No Bid Decision

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.

A. Customer:
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:
Date:
Contact:

B. Supplies and Services:
Specify the supplies and services to be delivered in the prospective contract:

Line Item (s):

Description:

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:

Line Item:

Delivery Date:

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:

Management:

Technical:

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 $______
Material _______
Travel _______
Reproduction _______
Samples (if any) _______
Packaging/Binding/Ship _______
TOTAL $_______

J. Analysis: 

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 strategy under H before you make your final decision.

K. Decision: 

BID _____

No Bid _______

What is a "Compliant" Federal Government Services Contract Small Business System?

It seems the single word, "Compliance" in small business federal government services contracting business systems implies many different things:

• Small Businesses wish to know about compliance to assess the cost of doing business with the government, assure readiness and business system capability.
•  Software Suppliers maintain they have compliant tools to achieve government contracting business management and wish to sell them.
• The Defense Contract Audit Agency (DCAA) has the mission to insure compliance with Cost Accounting Standards (CAS) under the Federal Acquisition Regulation.
• Defense Contract Management Agency Fact Finding Teams wish to observe small business systems to determine if an enterprise is capable of pricing, job cost accounting and billing consistency.
  
• Prime Contractors wish to know if a subcontractor is compliant with FAR and CAS so related flow down clauses can be made part of contractual agreements.

The criteria for determining government contracting small business system "Compliance”, as discussed above, is met when:

1. The business system is unique to the company, and recognizes the way the firm is organized and the way it manufactures or delivers products, supplies or services. Each company does business in a slightly different way, performs services or delivers products with organizations that function in various manners and yet all ultimately meet Modified US Government Cost Accounting Standards (CAS) objectives by live data demonstrating consistency with regard to cost allocation to contract objectives in pricing, job cost accounting, billing and closeout.

2. The business system meets Modified Cost Accounting Standard (CAS) Coverage defined by the government is as follows:

Standard 9904.401, Consistency in Estimating, Accumulating, and Reporting Costs  Standard 401


Standard 9904.402, Consistency in Allocating Costs Incurred for the Same Purpose Standard 402

Standard 9904.405, Accounting for Unallowable Costs Standard 9904-405, Accounting for Unallowable Costs Standard 405     Unallowable Costs


Standard 9904.406, Cost Accounting Standard—Cost Accounting Period  Standard 406


Modified, rather, than full, CAS coverage may be applied to a covered contract of less than $50 million awarded to a business unit that received less than $50 million in net CAS-covered awards in the immediately preceding cost accounting period.
 

The following article contains practical business system guidance regarding building a Modified CAS Coverage Small Business System for federal government contracting:
Managing Risk In Business System Development

Read the above government requirements and business system development guidance, and then give your selected method of business management the Modified CAS litmus test. Make a judgment that is the best for your company and try it out on DCAA. If they have problems with the approach you can adjust it.

The bottom line objective is that you wish government approval going forward so that your rates are accepted in proposals, your audits have a satisfactory outcome and you get paid when you submit a billing. Without those critical success factors the business cannot operate.

A FREE Companion Supplement to "Small Business Federal Government Contracting" Guidebook

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We are pleased to offer this supplementary material free of charge to small business. 

The basic guidebook has been available as a free download at this site and will remain so as a service to small business. 

The supplement offers 19 additional topics.

Like the basic book, the supplement is a free download from the BOX cube in the right margin of this site. 

Supplement topics are annotated in RED on the table of contents at the above  illustration. 

Although both the basic book and the supplement have been on the web for some time, the live links in both documents lead to the latest information on a given topic at this site.