Get ready to survive contracting delays
Critical questions to control costs when procurements get postponed
- By Bob Lohfeld
- Mar 07, 2011
Bob Lohfeld is CEO at Lohfeld Consulting Group.
Procurement delays have become an inevitable part of the business development life cycle. Coping with delays can be easier if you know how to manage through these difficult periods.
When the government delays a major RFP, the costs can be significant for all bidders. Short delays can turn into weeks and months, and keeping the capture team together can cost an additional $1 million each month the procurement is delayed.
The greatest cause of bid and proposal cost overruns comes from delays in the expected RFP release date, so estimating RFP dates is serious business. Making better estimates for release dates and managing resources are critical to controlling those costs. Too often, the government’s response to requests for release dates is “soon” or “the RFP is imminent.” Capture managers should be cautious and even skeptical about forecasted dates.
To better pin down an RFP release, ask the government contract shop to explain the process for releasing an RFP. Build a flow diagram so you can see all the steps. Develop an estimate of how long it takes for the contract shop to complete each step in the process. Ask where your RFP is in the process, and validate your estimate of the time remaining to complete the process. By doing this, you might discover that an RFP that was imminent couldn’t possibly be released for another 90 days. Knowing this could allow you to deploy your capture resources safely to other programs while you wait for your delayed RFP.
If you can’t get a good release date estimate, the next best thing is to bracket the release date. You may determine that the RFP couldn't possibly be released before a specific date. Alternatively, delaying the RFP beyond a certain date might be unlikely because funding could be lost. With these two dates in mind, you can bracket the RFP release date, saying, “It won’t be released before a particular date, and it won’t be released any later than another date.”
Validating the pending RFP release date is also important. Don’t simply accept the first date you are given. Try to get an informed estimate from more than one source, and then compare estimates to raise your confidence that your estimate is correct. Failing to validate your data can be costly to your profession and your company’s bid and proposal money. I watched one capture manager tell a boss that he had just talked with his person in the government and was told that the RFP for their must-win program wouldn’t be out for nine months. As soon as he said that, another manager said the government would release the RFP that week. The discussion escalated with both managers arguing that they were right. Time would tell who was right. By the end of the week, the RFP was released, and the first capture manager‘s career with that company was over.
The best strategy is to anticipate delays and build a smaller core team to manage the pursuit with a plan to add additional resources as the RFP date becomes more certain.
The closer you get to the projected RFP release date and the fewer steps that remain in the RFP release process, the more accurate your estimate should be. With a better estimate, you can ramp up or ramp down your resources accordingly.
Planning for surge staffing is a practical approach, and having resources on call is a necessity for the capture and proposal team. Ramping up resources is certainly more economical than keeping your team in place waiting for an RFP that is imminent but never comes.