Sequestration. Budget cuts. Reduced spending. Federal contractors know that these are challenging times – but is your business adapting in time to keep pace?
One consequence of the shrinking federal marketplace is a noticeable shift away from “best value” procurements and towards awarding contracts to the “lowest price, technically acceptable” (LPTA) offeror. In other words, rather than looking to contractors to demonstrate in detail what they can add to a project (based on past performance, subject matter expertise, management capabilities, etc.), agency decision making is being driven exclusively by the bottom line price – even on complex professional services contracts.
While there is certainly an argument to be made that the LPTA decision making model simply does not work on services contracts – the reality is that LPTA awards are here to stay for the foreseeable future.
So the question is – how should contractors alter their approach to compensate for this movement in agency decision making?
1. Understand the Solicitation. Pretty basic, but totally necessary if you are going to develop an effective procurement strategy. Understand exactly what the government is purchasing and how it will evaluate your proposal to provide those services.
2. Adapt the Proposal. One size does not fit all in proposal writing. When responding to an LPTA solicitation, a proposal that highlights all of the additional bells and whistles that your company can add misses the mark. In fact, any extras or perks will likely increase your price and take you out of the running for the award. An LPTA proposal should be looking to “hit all the wickets” required to be technically acceptable, nothing more.
On the other hand, a best value solicitation is asking you to put your best foot forward and go beyond the basics. Although you’ll want your proposal to check all the boxes required to be technically acceptable, you also need to look for areas where your company can provide better value than your competitors – even if it means offering a higher price.
The key for proposal writing is to “know when to say when.”
3. Massage Your Price. Unsurprisingly, how you approach your price will often make all the difference in winning a contract award. For best value solicitations, this involves a carefully balanced assessment of the level of services being offered vs. the overall price. However, no such considerations apply in the LPTA-world. The offer is essentially a hard bid – and your strategy should revolve around creative ways of driving down your price as low as possible while still meeting the minimum requirements (such as merging management responsibilities and effectively utilizing subcontractors).
4. Get the Award. You did your homework and tailored the proposal perfectly, but still did not win the contract. Why? It could be that the agency improperly applied its own decision making criteria. The Government Accountability Office and Court of Federal Claims routinely grant bid protests where the agency fails to properly apply the proper decision making basis. Know your rights and act quickly!