Key Formula for Winning Cost Proposals

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In a highly-competitive environment with tight financial constraints, your cost proposal solution should never only be compliant but responsive, competitive and convincing.

From the price side, it truly is nearly impossible a great impact on the technical proposal. But you can follow seven key basics that may go a long way to cooking your next proposal complete cost proposal too.

1. Have available and earn use of current customer information – are aware of the market factors driving price.
Knowing what your customer is about is the initial step. You are merely guessing around the customer without familiarity with their prior buying history, their budget pressures, authorized program funding, deductions for program support, customer staff, and reserves at the same time as their independent cost estimate and whether or not they are price oriented or performance oriented. You must obtain your intelligence ethically.

2. Know what it really costs your organization to do business.
We’ve often been told by many companies they can’t find out exactly what it costs to try and do the work before the final RFP equates. That’s hogwash. With a draft RFP that can be done an early estimate of exactly what costs you to complete the work. Without a draft RFP you have to have enough intelligence around the procurement to estimate exactly what it will cost you – even if it truly is a wide ranging estimate. Remember this isn’t an exact science and you’ll get more accurate as you become closer to the true RFP. Knowing the costs early can help you get creative during the last step. If you wait till the final RFP happens, you’re too late to have a creative difference inside your pricing (distinctive from cost) because you’re too busy guessing about what the true costs are. With understanding of your costs early, you possibly can make many creative choices to win.

3. Know what your competition’ costs are to try and do the same business.
Without competitive information, you happen to be just guessing about just what it takes to win. This information is easily obtainable through GSA Advantage, Internet searches, FOIA requests, and subscribed search services for instance EZGovOpps and GovWin. Find out who your competitor teammates are and ways in which they will bid by taking a look at past wins by the competition and teammates. Gather intelligence by what corporate investments they may be likely to make inside project and what their probable approaches will bidding. Find out the tiny tricks your competition use to obtain lower pricing for example changing work locations for getting to lower base, infusing productivity enhanced tools, staff greening. Companies tend to complete the same things as time passes. You also ought to consider whether the competition are incumbents. Incumbents are likely to take fewer risks and think less ‘outside the box’.

4. Provide a well-designed work breakdown structure (WBS) that ties towards the performance work statement and is particularly supported by foundation of estimates.
We feel that without a WBS for estimating the task outlined inside performance work statement and the statement of training, you cannot adequately contemplate all from the elements in connection with performing. You are more likely to leave out some elements or potentially double standing on your estimates. We often see that a three level WBS is adequate to estimate the job. Further, we have seen that contractors frequently estimate in any way levels with the WBS as opposed to only at the next level, causing confusion and estimating incorrectly. When you develop this amount of detail, it can be easier to detect where you can create corrections, cuts or addendums to your costing.

5. Actively determine your enterprise investments within the project you’re bidding.
Company investments are the type items that your corporation makes to boost the performance or efficiencies from the project (training, recruiting, transitions), investments in property, plant and equipment, and project-specific reductions taken through the corporation in indirect rates. All of these forms of investments are which are shouldered with the corporation and so are not reimbursement items because of the Government.

6. Be the company that is certainly easy to have an account with.
Give them whatever they ask for and even more. The company that wins could be the company that produces the evaluation easy, is definitely the data (technical and price) inside an organized trackable fashion, and is the data in the written and electronic formats. Even if the RFP doesn’t require electronic format, give it on the Government because of this anyway. Retain all formulas so the evaluator can readily follow your thought processes. Remember, the firm that provides them the written and electronic version they’re able to trail through, may make unscored points using the evaluators.

7. Be cost competitive and acquire creative over it.
This step will be the easiest (really) in case you have satisfied the many remaining steps before this one. This means you sharpen your pencil as well as your mind about labor rates, staff greening, de-escalation, competitive fee structures, competitive and new indirect rates, bidding direct whenever you can, and company investments.

All those details aside, there has to exist an obvious unity of purpose and thought among every one of the elements in the proposal. Simply put, you can not describe something within the technical or management proposal that is not identified in price. Many (maybe most) proposals are incredibly hard to trace in one volume to an alternative. Brash as it could sound, there ought to always be an identifiable link between the weather, even when you should create it for yourself.

Most projects or products, either implicit or explicitly possess a work breakdown structure. For projects it is often something like the structure on the statement on the job. For products it could look much like the specification. However it happens in addition to being difficult as it can be to have agreement on it’s specifics, this sort of breakdown exists. It’s this breakdown that may be the most viable contender for linking the many volumes.

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