Jim Kane


5 questions to ask before your next bid

Just because you can bid, doesn't mean you should

A formal management decision to bid on an opportunity and to release the associated bid and proposal funds is a significant commitment for any company.  An upcoming opportunity may have been tracked for months and critically assessed at regular pipeline reviews.

However, the conventional wisdom and inertia generated in those pipeline reviews may obfuscate key management information critical to a truly informed bid decision.

The bid board team may present all the prescribed information to comply with a company’s guidelines but that may fail to answer five key questions to which management should have these five answers before a final decision on the investment of B&P funds.  

1. Why is this opportunity a target?

Don’t confuse an available opportunity, a contestable opportunity and a target opportunity.   Just because an opportunity is available and the team believes there’s a chance to win is not sufficient reason to bid.  B&P funds are precious dollars with high opportunity costs.  While it’s the responsibility of business development to bring qualified opportunities to the table, it’s the responsibility of executive management to ensure a company invests its B&P dollars consistent with the company’s business strategy and focus.  Both executive management and the bid board team must have the same answer on why a specific bid opportunity is a target. 

2. What is the company’s competitive position?

Merely identifying the known and potential competitors is insufficient information.  The more critical information is to understand how the company’s proposed offering is positioned versus the competition.  Can the team show a graph or picture that identifies the company’s position and demonstrate the competitive advantages of that position?  For example, where is the company’s offering positioned on a price-performance curve?  Where are the company’s rates versus recent contract wins by competitors?  How does the team protect and defend the company’s competitive advantage or overcome its disadvantage?

3.  What is the internal implementation plan?

We all have heard the advice, “Don’t confuse winning the job with doing the job”.   Nevertheless, customer dissatisfaction, cost overruns, and program failures often can be traced to broad-brush attention on how a company will implement upon award.   At a minimum, all functional units within a company should be aware of any bid, and any functional unit that might support implementation must have a seat at the bid decision table.   The internal implementation plan should share the same structure as the sales-oriented implementation plan presented in the proposal but proactively address internal processes and relationships critical for successful implementation.

4.  Do the financials have analytical integrity?

Revenue is still calculated as price x quantity the last time I checked.   In contrast, revenue forecasts that merely restate the estimated contract value totally miss that point and demonstrate a lack of programmatic insight on how a company actually will generate the expected revenue.  Cost forecasts should be consistent with the implementation plan.  The level of granularity for revenue and cost estimates may be relatively coarse at this stage, but the conceptual underpinning -- e.g. price x quantity, hours x rates, etc. – should be transparent and internally consistent.

5. What are the risks and how are they mitigated?

Stuff happens.   The earlier executive management understands the risks associated with any bid, the greater the probability the risks can successfully be mitigated.   This is true for risks both in the proposal phase and implementation phase.   Successful companies know how to manage risk, but first have to identify and understand it.  Any bid decision worth its salt must reflect explicit and candid discussion of potential risks.

These five questions are not rocket science; they are merely a variation of basic components of almost any business case.  Management emphasis on these questions and their answers will ensure B&P dollars are effectively invested and enhance capture and program success.

About the Author

Jim Kane is an advisor to companies in the federal market, and former president and CEO of the Systems and Software Consortium Inc.

Reader Comments

Fri, Feb 8, 2013 Garrulous Susie No. Virginia

For these Washtech opinion pages, this is two orders of magnitude more valuable and substantive than many other, hackneyed pieces by look-at-me "consultants." And the author is a real industry personage of considerable renown, rather than a "consultant" scrapping for $15K engagements. Wash Tech needs to change out almost all of its "opinion" contributors

Wed, Feb 6, 2013 Christina Washington, DC

Very timely! We are a small company and bids take a lot of our resources - thx.

Tue, Feb 5, 2013 Carol Ackerman Phoenix, AZ

Excellent recap, great advice and well written. Timely for my clients - thanks.

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