Full Sail Partners Blog
Often times, upper management views the proposal process as a “cost of business” and don’t put forth a concerted effort to control proposal related costs. There are several ways to increase the cost-effectiveness of your proposal process, and starting with a bid/no bid process is the first step.
Did you know that 40% of AE firms have no formal bid/no bid process? This is according to the 36th Annual Deltek Clarity AE Report. For that reason, I’m going to focus on the importance of the bid/no bid process. More specifically, why the decision can be made during any phase of the proposal process.
Notification of New Opportunity
Let’s start by saying that if you’re receiving notification of a new opportunity within your industry when the request for proposal (RFP) is issued, your business development team is already crippling your chances of winning that opportunity. This is a huge red flag to include in your bid/no bid process. On the other hand, if they have a great relationship with the prospective client, they probably have a decent understanding of the scope of work and the project requirements. Either way, this is the first opportunity your company has to decide whether to bid or not to bid.
Honesty is the best policy, so be honest with yourself! If you specialize in building parking garages and the RFP is for a bridge, your chances of winning are already slim. Sure, you want to branch out and do more than build parking garages, but is this client the one that’s likely to give you that chance? Odds are, probably not.
Release of the RFP
Now you have the RFP that in a perfect world has a detailed scope of work and all the requirements. This is when the page turning begins with a detailed review of every word. Does your proposed solution work within the stated budget? Have you revealed any obscure requirements that are red flags? When evaluating your solution and the requirement, create a risk management plan and think about how your company has managed similar risks in the past.
There’s the old adage, you can’t fit a round peg in a square hole. In other words, if you can’t provide a solution within the requirements of the RFP, your chances of winning are already greatly diminished. Instead proposing on this opportunity, utilize your resources on an opportunity within your company’s skill set.
During the Proposal Preparation Process
As you begin to develop your solution, keep in mind that it’s still not too late to abandon the RFP. In some cases, the client may issue amendments or provide clarity that changes the scope of work. Other times, the proposal preparation team may find that the proposed solution has become more complex than originally thought or certain costs were overlooked.
Usually people say “better late than never” as an excuse. However, in this case, it’s absolutely honorable to walk away from an opportunity before committing your company to something it might have difficulty delivering. In the end, winning the work doesn’t guarantee a profit or a happy client.
Winning with a Bid/No Bid Decision
In the proposal world, there are always two winners for each RFP. Obviously, the company that wins the bid, but the less obvious is the first company to decide to focus their resources on other business opportunities. As a proposal manager, you want to increase your win rate, and at the same time, upper management has the need to win more revenue. While this puts the two sides at odds, agreeing to an effective bid/no bid process can significantly increase your proposal cost-effectiveness and possibly increase revenue for the company.