Bidding Jobs: Just Because You CAN Does Not Mean That You SHOULD

Bidding Jobs: Just Because You CAN Does Not Mean That You SHOULD

Swing for the Fences. Just Do It. Go Big or Go Home. These messages to strive for success at all costs work well on bumper stickers but not one of them is worthy of basing your business practices on.

Most times, recognizing a promising opportunity for getting new business involves nothing more sophisticated than having a gut instinct about being right for the job. But, make no mistake, even obviously promising bids need to be carefully scrutinized before proceeding.  Recently, I was in a conversation with a colleague regarding a new business opportunity for one of our clients.  At one point I made the observation that the scope of work was, “…dead center of the client’s wheelhouse.”  “True enough,” my colleague replied, “but I absolutely hate that cliché.  It implies that our clients should bid a job simply because they can do it.”  He is, of course, 100% correct.  Moreover, I will argue that it is far from the most important consideration.  We definitely do not want to begin and end our opportunity assessment here.  So, what are the elements of an effective opportunity assessment?

  1. Be Ready to No-Bid.  In many organizations, it is considered a best practice that all assessments include “no-bid” as one alternative.  It costs, in dollars and other resources, to pursue an opportunity.  It is a common mistake to continue to pursue an opportunity when analysis shows that those resources could be better applied elsewhere.
  2. Be Brutally Honest. I recently looked at a new opportunity on FedBizOps that had 15 qualified organizations on the interested vendors list.  Without additional information, the win probability for any one of these organizations is no more than 6.7%.  It is a common trap to rationalize a better prediction with generalizations about the superiority of “our solution” or other factors without substantiating data.  This over-optimism often causes an organization to continue pursuit when their interests would have been better served by an early decision to no-bid.
  3. Be Thorough. Do your homework and research.  Be able to answer the Big 3 Questions:
    1. Is the opportunity real? Funded? Ground rules for award published? PEST factors considered?
    2. Can you win? Complete the sentence: “The customer will pick me because…..”  Do you know your competition? Your customer? Is your SWOT analysis complete? How much can you bid and still win?
    3. Do you want to win? What are the risks – contractual, financial, performance? What investment is required?  Is your ROI analysis done and opportunity cost assessed?
  4. Have an Action Plan. Let’s go back to our earlier example of a 6.7% probability of win (Pw).  An action plan for this hypothetically might include a goal of achieving a win probability assessment of 75% to be reached by the time the final RFP is released.  How will you measure progress? (Your PEST and SWOT analyses are a good place to start.)
  5. Continually Reassess. Seldom is all of the information needed for opportunity assessment available at the time when an opportunity is identified. Each progressive disclosure should be a signal to reassess the opportunity.

The payoff for all of this rigor is in your win rate.

A real life example:  A large organization I once worked with put out 105 proposals per year and had a 5-year win rate of 35%.  This changed when a new president was assigned who instituted assessment processes consistent with the guidelines discussed above, including making it policy that we would not bid any opportunity in which the Pw was not 75% or better.  The following year, we still bid on 105 proposals, but our win rate jumped to 86%.  Our capture and proposal teams did the same amount of work, but we were able to quickly abandon low Pw opportunities and actively improve the Pw on the opportunities we did pursue.

The opportunities we did not pursue proved to be as important to the bottom line as those that we did.

In the coming months we will discuss implementation of these principles in more detail.

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