How well do you know the incumbent?

One of the questions government contractors should ask themselves before deciding whether or not to pursue an opportunity is this: “Do we know the incumbent?”

Some ask, but many ignore this critical question.

A lot of potential bidders, unfortunately, assume the incumbent knows all there is to know about the opportunity, and has his win strategy in place for months, perhaps years.  If he sees a need for subcontracting, he’s had his favorite candidates committed in ink for a long time.  If the customer wants something different from what he bought last time, who knows that better than the incumbent?

That’s not a good reason to ignore the incumbent.

If you don’t know for sure, the incumbent may be in trouble. There may be issues brewing between the customer and the incumbent that will make re-winning the opportunity more difficult for him.

If there are any problems, it’s much more difficult for the incumbent to propose new solutions without creating a question in the mind of the customer: “If you already know about this solution, why didn’t you bring it directly to me, sooner? Why do I have to wait for the award of a new contract to get the benefit of your best problem-solving skills?”

If the opportunity is a small business set-aside of any type, and particularly if the incumbent was good, he may no longer qualify for the set-aside size standard.  He may have grown out of the job.

Of course, that difficulty is easily explained away; he could have long ago identified an eligible partner, perhaps even brought that partner in as a subcontractor on the current contract, and have a deal in place to become his chosen partner’s sub, retaining as much of the work as he can.

But that deal is more tenuous the earlier in the bid cycle it’s consummated. And the incumbent has a price disadvantage: he’s either got to drop his rates to enable the new prime to cover his costs, cut salaries to his workers, or let the new prime raise the rates from the incumbent’s rates.

None of these are very attractive options.

(For more on this aspect of the subject, see Dennis’ and Gary’s Dec. 19, 2014, Washington Technology article, “How to avoid a deadly case of incumbent-itis.”)

Even if the incumbent has his strategy nailed down, there’s still reason to call him up and see if you can go and meet him.

Of course, when you do, you should expect the incumbent to tell you that the decision has already been made and that there’s no point to you wasting your proposal dollars trying to beat him. This may or may not be true, but he’s pretty much obligated to tell you that anyway.  If he can talk you out of submitting a bid, you’re one player he doesn’t need to beat in the actual competition.

And to make this approach work, the incumbent has to become the subcontractor. Being named in a proposal as another company’s subcontractor isn’t as powerful as being the prime. It just isn’t.

The government will be doing business with the prime contractor. They will be trusting the prime contractor to make them successful in their careers. Prime-sub relations can occasionally be bumpy, or even break down; the government is still dealing with the prime contractor, not the sub.

And who knows?  You might even find a senior employee who’s looking to jump ship.  If you play this card, however, be sure you know what non-competition agreement the employee is bound by.  He might be ethically and legally restricted from providing much information.

But the biggest reason it’s worth your time to talk to your competitor is, with surprising regularity, he will volunteer to tell you things you didn’t know. Oftentimes, things you can’t believe he would share with a competitor. 

Confidence (some might say overconfidence) is a powerful emotion.  It can cause business developers to do strange things. (Note to self: remember this lesson when you’re on the other side of the table.)