If your company’s sales operation is organized around BD, capture management, and proposal development, it is probably time to modernize. Those functions are based on a passive approach: Wait for the government to write an RFP, find out as much as you can about the RFP, write a compliant proposal, and hope you win. That worked fine when government spending was abundant. But now with so many companies chasing each RFP, a more competitive stance is needed. But there is a solution. This blog post explains.
Steepened competition is affecting federal contractors large and small. When Lockheed Chairman and CEO Marillyn Hewson announced plans to divest the bulk of their IT business, steepened competition was clearly the reason. She said, “It is increasingly difficult for us to be competitive under our standard business model.” (Lockheed to sell bulk of IT business, Washington Technology, July 20, 2015). Meanwhile federal contractors throughout the market are consolidating. Why? To drive down fixed costs by spreading them across a broader base. And why the focus on cost? Because, unable to compete on results, they must compete on cost. Unable to differentiate themselves from their competitors, unable to find the “special sauce” they need to stand out, they have no choice but to lower their prices.
How can you avoid this problem? Replace your BD, Capture, and Proposal functions with new functions (the same people trained for new enhanced roles) that enable you to differentiate your company and compete more effectively based on the results you deliver, rather than price. An earlier blog post described these new functions: Intelligence, Content, and RFP-Shaping. Below I explain the problems with traditional BD that make this change essential.
Problem 1 with Traditional BD: No Time to Shape RFPs. Ideally you want to shape RFPs to require your solution. But RFP-shaping requires time that is not available when RFPs are announced too late. And they usually are. By the time you know about an RFP, it is usually solidified. But the government plans and budgets for projects long before writing RFPs. Through budget research, federal contractors can learn about RFPs well before their release, and use that time to shape the RFPs. Click here for an earlier blog post discussing budget research.
Problem 2 with Traditional BD: No Means to Shape RFPs. Even with time available for RFP-shaping — such as when the government issues an RFI — most firms are unable to shape RFPs because they lack a value proposition that will resonate with and compel the government to require the firm’s solution. For the government to alter their plans, your value proposition has to be about solving a government problem that your competitors’ solutions do not solve.
So how do you develop such a value proposition? In fact a systematic method is available that frequently yields compelling value propositions. Click here for an earlier blog post that describes it.
Firms that follow the traditional BD approach undersell in today’s hyper-competitive market because they lack the time and the value propositions necessary to shape RFPs. Through budget research, and systematic development of compelling value propositions, companies can turn that situation around, and dramatically improve their win rates.