How to Bid On Government Contracts
Federal Government organizations are unique in how they procure goods and services. They release Requests for Proposals (RFPs) that result in awarded government contracts for their needs and solicit proposals from government contractors.
Five Key Points, Regarding RFPs:
- To win government contracts, you must learn how to identify RFP requirements
- You must differentiate your company from your competitors
- Proposals must be 100% compliant with RFP instructions to be considered
- The winning bid is NOT always from the most capable or qualified bidder!
- The winning bid is the proposal with the highest score…not necessarily the best solution.
Proposals are scored…not read.
To win a government contract, your proposal must have the highest score from both your technical and pricing proposals. RFPs will tell you exactly how the proposal will be scored, so if you learn good proposal “building” strategies, then you will win a lot of government contracts. Think of submitting a proposal as taking a standardized test, like the SAT. You don’t always have to know the answer if you have good test-taking skills and strategies. In many cases, you simply need to eliminate the incorrect choices.
Effectively pricing your proposal is also vitally important.
Fortunately, you don’t need to learn accounting, bookkeeping or finance. You can easily outsource these functions and there are plenty of businesses to perform them. However, you must know how to competitively and realistically price your proposals. You need a pricing strategy to maximize your profit while providing your customer value. The Federal Government wants “best value” and that does not necessarily mean the “cheapest.” In addition you should understand that, pricing strategies vary, depending upon the customer, work performed and contract type.
Government Contracting Academy will help your company effectively compete in this lucrative industry by sharing their industry “insider” tips.
You’ll learn how to effectively “build” stand out proposals that are 100% compliant. You’ll also learn how to price your proposals to avoid common small business mistakes, such as “pricing yourself out of business!”
Tip #1: Writing Compliant Government Proposals
Even if your company is better, faster AND cheaper than other bidders, you will not win the contract unless your proposal is 100% compliant with the requirements in the RFP.
Fact: The best company does not win … The best proposal does.
The best proposals are the ones that are both fully compliant and score the highest.
You Are Not Writing an English 101 Paper!
Most unsuccessful bidders focus on writing well-written proposals. Although you should strive to write a proposal that may be easily read, that is not the focus. The selection board members do not grade your writing like an English 101 paper. Instead, they use a scorecard and search proposals for responses to each RFP requirement. Therefore, you cannot win unless you are compliant!
The Secret: “Shred” the RFP to Identify All Requirements
To save countless hours while “shredding” an RFP, use this industry “insider” tip. Download the RFP and do “word searches” for the following words:
Although this is a quick way to identify nearly every requirements, you must still read every word of the RFP. You are guaranteed to find at least one additional requirement that is hidden deep in the RFP. Requirements range from the font to use in the proposal to specific qualifications your program manager must possess. Copy each one of these requirements in your government proposal compliance spreadsheet. This “keyword search” is also invaluable when assessing an RFP to make a “bid/no bid” decision based upon the RFP requirements.
KEY FACT: RFPs will usually have over a hundred requirements, so if your “shred” is coming up with significantly less requirements, then the RFP is likely separated into separate files. You must search each file.
YOU now have a scorecard, too! Create a “to do” list from the requirements spreadsheet and check off each one completed.
Use Government Proposal Writing Requirements for Compliance Review
A comprehensive government proposal writing requirements spreadsheet will not only help you write a compliant proposal, it will make the proposal better by supporting more detailed editing and reviews. Before submitting your proposal, ask a trusted colleague to review of your proposal using your requirements spreadsheet as a scorecard. This person does not have to be an expert in the field or familiar with the customer’s mission or organization. In many cases, a completely “outside source” can provide you the best review.
Government Contracting Academy provides its clients with the training and tools to effectively shred and track RFP requirements. Unless your proposal is fully compliant, you won’t win.
Tip #2: How Technical (Non-Price) Proposals are Evaluated
Proposals are scored and not read.
Of course, the government reads the proposal. But the government does not read and grade like your English 101 professor. Instead, the evaluation board reads more like a word search puzzle seeking answers to specific requirements.
How Proposals Are Scored
The proposal selection board evaluates how you respond to each of their requirements and assigns you two scores:
- How well your solution addresses the requirement.
- Their level of confidence that your company will successfully provide the solution, as stated.
Here’s how the two scores work…
You are in the shipping industry responding to an RFP to move twenty tons of military hardware from Point A to Point B. Inspired by Star Trek, you propose a Teleport Machine that will instantaneously teleport anything to anywhere. Of course, the government loves that capability, and your proposed solution receives the highest possible score.
Unfortunately, you provide no supporting past performances where you have successfully built a Teleportation Machine. In fact, you don’t cite a single relevant patent. Therefore, the proposal selection board will score your solution with a zero level of confidence.
The two scores work like an “expected value” calculation with your solution value multiplied by the confidence level, or probability, of solution success. Your Teleportation Machine receives a high score but has zero probability of success, providing an expected value of zero.
The key points to a high proposal score are:
- Fully addressing every RFP requirement
- Providing “proof points” to increase your customer’s confidence in your proposed solution.
To do this, perform a detailed “shred” of all RFP requirements. For each RFP requirement, “build” a response that demonstrates your detailed level of knowledge of the requirement and “proof points” that prove you have the ability to deliver your proposed solution. This is the primary challenge in government proposal writing for most small and new companies. Why? Most small companies successful “past performances” on other contracts that prove that they can deliver their proposed solution. However, there are “workarounds.”
Government Contracting Academy will share their secrets to help give confidence in your government proposal writing, even when you lack robust experience.
Tip #3: A Government Proposal Provides a Solution. Not a “Repeat Back.”
New and small businesses make a common mistake in their government proposal writing, they revert to the “repeat back.” They simply repeat back the requirement in a statement without providing a solution.
The Repeat Back
An example. You launch a company and bid on a NASA RFP. Your company has zero current or past performances as a Federal Government contractor. One of the RFP requirements states “The contractor shall provide all correspondence in Arial font.” Most small business competitors will, therefore, write a one-sentence “repeat back.”
“To comply with RFP requirement to use Ariel font, LazyAdmin LLC employees will type all correspondence in Ariel font.”
Don’t Just Repeat Back, Provide YOUR Solution
Take the opportunity to differentiate yourself with just one additional sentence! Your SuperAdmin LLC response, following a little research.
“To be consistent with NASA’s Document Control Instruction (dtd 16Oct14,) and to streamline content sharing, all SuperAdmin employees are trained at new employee orientation and annually thereafter to use Arial font on all correspondence. Our quality management program will implement a 100% correspondence inspection, ensuring compliance.”
- First, your company understands by citing why the requirement for Arial font exists.
- Second, your company solves the requirement through a training program, a new employee orientation program, a quality management program and management oversight.
This response allows you to stand out from your competitors while giving the government confidence in your proposal, despite not having any contracting experience.
In most industries, you must be better, faster or cheaper than your competitors to be successful. Though this statement is conceptually true, in the Federal Government contracting industry, the only criteria to win is SCORING HIGHER on your proposal.
Government Contracting Academy will teach you how to increase your proposals’ score!
PRICING YOUR PROPOSAL!
A proposal is divided into two parts
Non-Price Proposal (Technical Submission)
Most inexperienced small business owners focus on the Non-Price Technical Proposal and spend only a fraction of time on their Price Proposal. Among fully compliant bids, the Price Proposal is where many contracts are won and lost.
What is a Price Proposal? And Why is it Important?
A price proposal provides the justification for your price to provide your proposed solution. It is intended to prove to the government that your price is both realistic and reasonable. It is important because a Price Proposal can either cause your company to win when you have a weaker technical proposal or lose when you have a stronger technical proposal.
Here’s how. A $200K lower price could beat bidder with a better technical proposal and score. If two bids are around $3.5M, that $200k is a 5.7% difference in price. Many reasonable people can see the value in a 5.7% cost savings to the customer. This would lead to the Government making a “best value” decision and award the contract to the significantly cheaper bidder. They are justified in doing this, even if the cheaper bidder had a lower score on their technical proposal.
HOWEVER, the government retains the right to make a “best value” decision for this same pricing differential on $35M bids as in the case of the previous example.
Cheap But Not Too Cheap
The government likes cheap, but not too cheap.
“Cheap provides a value. Being too cheap creates risk.” ~ Randy Wimmer, Government Contracting Academy
The government assesses your Price Proposal for realism. They verify that you’re not proposing to increase employee salaries by 20%, hire dedicated overhead staff to support the program team, and open a new office next to the customer’s worksite for quicker support while pricing your proposal at 30% below the incumbent’s price. Historical data and detailed research must be used to validate every dollar of cost that you propose.
Evaluating a Price Proposal is a lot more than looking at the price tag.
A formal pricing work up must incorporate all of your costs, to include:
- Direct labor costs
- Fringe costs
- Overhead costs
- General & administrative costs
- Profit (everyone’ favorite!)
Government Contracting Academy will show you how to preserve your profitability while showing more value to the government.
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“Proposals are scored…not read.”
About Randy Wimmer
Randy’s first Federal Government contracting company was launched from his home after his kids went to bed. He later sold it for 8-figures. With nearly thirty years either in or supporting the Federal Government, Randy is the ultimate “industry insider,” having owned multiple successful contracting companies.