Seven Key Formula for Winning Cost Proposals

In a largely competitive terrain with tight budget constraints, your cost offer result mustn’t only be biddable but also responsive, competitive, and satisfying.

From the cost side, it’s nearly insolvable to have an impact on the specialized offer. But you can follow seven crucial basics that will go a long way to making your coming offer a winning cost offer as well.

Have available and make use of current client information- know the request factors driving price.
Knowing what your client is each about is the first step. You’re simply guessing about the client without knowledge of their previous buying history, their budget pressures, authorized program backing, deductions for program support, client staff, and reserves as well as their independent cost estimate and whether they’re price acquainted or performance acquainted. You must gain your intelligence immorally.

Know what it costs your company to do business.
We have frequently heard from numerous companies that they can not find out what it costs to do the work until the final RFP comes out. That is hogwash. With a draft RFP you can do an early estimate of what it costs you to do the work. Without a draft RFP you ought to have enough intelligence about the procurement to estimate what it’ll bring you- indeed if it’s a wide ranging estimate. Remember this isn’t an exact wisdom and you’ll get more accurate as you get near to the real RFP. Knowing the costs beforehand will help you get creative in the laststep.However, you’re too late to make a creative difference in your pricing ( different from cost) because you’re too busy guessing about what the real costs are, If you stay until the final RFP comes out. With knowledge about your costs beforehand, you can make numerous creative choices to win.

Know what your challengers’ costs are to do the same business.
Without competitive information, you’re just guessing about what it takes to win. This information is readily available through GSA Advantage, Internet quests, FOIA requests, and subscribed hunt services similar as EZGovOpps and GovWin. Find out who your contender teammates are and how they will bid by looking at once triumphs by your competition and their teammates. Gather intelligence about what commercial investments they’re likely to make in the design and what their probable approaches are to bidding. Find out the little tricks your challengers use to get lower pricing similar as changing work locales to get to lower base, investing productivity enhanced tools, staff greening. Companies tend to do the same effects over time. You also need to consider whether your challengers are incumbents. Incumbents tend to take smaller pitfalls and suppose less’outside the box’.

Give a well- designed work breakdown structure (WBS) that ties to the performance work statement and is supported by base of estimates.
We believe that without a WBS for estimating the work outlined in the performance work statement or the statement of work, you can not adequately suppose through all of the rudiments related to performing. You’re likely to leave out some rudiments or potentially twice over on your estimates. We frequently find that a three position WBS is acceptable to estimate the work. Further, we see that contractors constantly estimate at all situations of the WBS rather than only at the third position, causing confusion and estimating inaptly. When you develop this position of detail, it’s easier to descry where you can make corrections, cuts or additions to your going.

Laboriously determine your company investments in the design you’re bidding.
Company investments are those particulars that your pot makes to enhance the performance or edge of the design ( training, recruiting, transitions), investments in property, factory and outfit, and design-specific reductions taken by the pot in circular rates. All of these types of investments are those which are shouldered by the pot and aren’t payment particulars by the Government.

Be the company that’s easy to do business with.
Give them what they ask for and further. The company that wins is the company that makes the evaluation easy, presents the data ( specialized and cost) in an systematized trackable fashion, and presents the data in both written and electronic formats. Indeed if the RFP does not ask for electronic format, give it to the Government that way anyway. Retain all formulas so that the annotator can fluently follow your study processes. Remember, the establishment that gives them the written and electronic interpretation they can track through, will probably make unscored points with the observers.

Be cost competitive and get creative about it.
This step is the easiest ( really) if you have satisfied all the remaining way before this bone. This means you edge your pencil and your mind about labor rates, staff greening,de-escalation, competitive figure structures, competitive and new circular rates, bidding direct whenever possible, and company investments. All those details away, there needs to live a visible concinnity of purpose and allowed among all of the rudiments of the offer. Simply put, you can not describe commodity in the specialized or operation offer that is not linked in cost. Numerous ( perhaps most) proffers are veritably hard to trace from one volume to another. Brash as it might sound, there should always be an identifiable link between the rudiments, indeed if you have to produce it for yourself. Utmost systems or products, either implicit or explicitly have a work breakdown structure. For systems it’s generally commodity like the structure of the statement of work. For products it might look a lot like the specification. Still it happens and as delicate as it might be to get agreement on it’s specifics, such a breakdown exists. It’s this breakdown that’s the most feasible contender for linking the colorful volumes. Absent specific direction in the supplication, this breakdown would make a sensible, easy to explain and important link between the specialized and cost proffers.”But the client did not ask us to do that.”, you say. Yeah, you might be right, but you do want to win do not you. Guests want to buy from companies that are easy to do business with. A great way to start to cement that print might just be by making your offer easier to understand than the competition’s.”But it’s too important work to do the pricing that way.”, you might say. You do want to win?


By Mk Faizi

I am a blogger.