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2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

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Page 1: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)
Page 2: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Morning Session

AgendaKEY TOPICS

Unit 1 The Buying and Selling Life Cycle

Agenda

Unit 1 The Buying and Selling Life CycleLearning to Dance Together Exercise: Q&A

Unit 2 Pre-bid/Proposal PhaseUnit 2 Pre bid/Proposal PhaseProcurement Planning, Solicitation Planning, and Preparation Exercise: Q&A

Case Study Acquisition Strategy

BREAK

Unit 3 Pre-bid/Proposal PhasePre-sales Activities and Bid/No-Bid Decision-Making Exercise: Q&A

Unit 4 Bid/Proposal PhaseBid/Proposal Development and Reviews/Approvals

2

Bid/Proposal Development and Reviews/Approvals

LUNCH

Page 3: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

UNIT 1

THE BUYING AND SELLING LIFE CYCLETHE BUYING AND SELLING LIFE CYCLELearning to Dance Together

3

Page 4: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

The Buying and Selling Life Cycle

Learning to Dance TogetherIn both the public and private business sectors, buyers are far more knowledgeable about their rights,

have higher expectations regarding the quality of products and services, have little tolerance for poor

performance, are quick to change their minds, and frequently complain if they do not get what they

want when they want it. y

Just like dancing, partner feedback is critical. You must know the difference between a partner's needs

and desires You must know how to treat your partner so you do not start out or end up on the wrong and desires. You must know how to treat your partner, so you do not start out or end up on the wrong

foot. Business partners must work together to achieve success, otherwise, one or both will stumble and

fall.

4

Reference Text: Solicitations, Bids, Proposals, and Source Selection: Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH, Chicago, IL, 2007, pg. 2

Page 5: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Creating Customer Value

Quality of Service

Supply-Chain Management

Speed Maintainability

Supply-Chain Management

On-TimeDelivery

Best-in-Class Service Trust

A il bilit

Best-in-Class ProductsTrust

Customer Loyalty

Availability of Resources

On-TimeDelivery

Breakthrough TechnologyReliability

Value

PriceType of Contract

Trust

Discounts

Financing

Payment Terms

Best-ValueDeal

5Reference Text pg. 4

RelationshipThird Parties

Quantity

Page 6: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Inadequate Customer ValuePoor Supplier

Low StockPrice

DownsizingEmployees

MarginTargets

R&D CostsToo High INSUFFICIENT

Lack ofChannel

Incentives

Poor SupplierSelection

High Turnoverof Key PeopleHigh-Risk

Contract

TargetsToo High

Too High INSUFFICIENTTRUST

WRONGPRICETOO HIGH

BadContractInsufficient

Volume

Marketing and Sales Costs

Too HighProduction

INADEQUATE CUSTOMER

VALUE

CUSTOMERTOO HIGH

Poor MarketSelectionToo High Costs Too High

Lack ofRight

Features

Lack ofTimely

DeliveryINSUFFICIENT

SelectionPoor Market

Segmentation

Features

Lack ofResponsive

ServicesPoor Product

Reliability

yINSUFFICIENT

QUALITY

6Reference Text pg. 5

Poor Supply-ChainManagement

Services

Page 7: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

The Buying and Selling Life Cycle

Buyer Step 2Solicitation Planning

Buyer Step 3Solicitation Preparation

Seller Step 1Pre-sales Activities

Pre-bid/Proposal Phase

Buyer Step 1Procurement Planning

Seller Step 2Bid/No-Bid

Decision-Making

THE BUYING AND SELLING LIFE CYCLE

Seller Step 3Bid/Proposal Developments

Buyer & Seller Step 7

Contract Administration &

Closeout

Bid/Proposal Phase

Post-bid/Proposal Phase

Buyer Step 4Source-Selection Planning

Buyer & Seller Step 6

Contract N ti ti &

BuyerSeller

Phase

Seller Step 4Bid/Proposal

Reviews & ApprovalsSeller Step 5Verbal Presentation & Response to Questions

Negotiation & Formation

7Reference Text pg. 7

SellerBuyer & Seller Buyer Step 5

Source-Selection Evaluation

Response to Questions

Page 8: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

Job Title: Contracting Officer

Linda Riviera

Organization: National Aeronautics and Space Administration (NASA), Office of Procurement, Johnson Space Center (JSC)

Location: Houston TexasLocation: Houston, Texas

Major Responsibilities: Currently supporting source-selection evaluation board activities within the Center Operations Directorate as the contracting officer on a major acquisition. Other major activities include supporting the as the contracting officer on a major acquisition. Other major activities include supporting the Institutional Procurement Office as a contracting officer in the contract extension activities for a major contract within the Center Operations Directorate.

Background: Linda Riviera is a Level III contracting officer working for the Office of Procurement at g g gthe NASA Johnson Space Center in Houston, Texas. During her 15-year career with NASA, she has supported various center organizations including the Mission Operations Directorate, the International Space Station Program, and most recently, the Center Operations Directorate.

8Reference Text pg. 18

Page 9: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

QUESTIONWhat actions do you suggest sellers take to ethically and appropriately influence buyers’

Linda Riviera

y gg y pp p y yrequirements?

ANSWERS

Th b t t it f ll t i fl b i t i i th i iti lThe best opportunity for sellers to influence buyer requirements is in the initialstages of the acquisition planning.

The government buyer may solicit from industry comments to the acquisitionstrategy in general and to specific areas of the strategy such as contract type, periodof performance and performance incentives of performance, and performance incentives.

Sellers should articulate their understanding of the strategy, provide positive ornegative comments with supporting rationale, and provide examples of theircompany best practices with similar types of contracts.

9Reference Text pg. 20

Page 10: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

QUESTIONWhat do you consider to be the top five seller best practices for developing a winning bid or proposal?

Linda Riviera

ANSWERS

The seller must develop their internal acquisition strategy, which includes researching the marketplace, knowing the competition, and understanding the buyer requirements.

The seller must read the requirements of the request for proposal (RFP) and generate a technical The seller must read the requirements of the request for proposal (RFP) and generate a technical and cost proposal that clearly articulate the seller’s methodology for fulfilling the buyer’s requirements.

The seller must prepare for verbal discussions by clearly identifying the roles of the selling team, articulating the selling teams commitment, and understanding the acquisition and being prepared with solutions to any weaknesses identified to the seller before verbal discussions. y

The seller should ensure that all issues or questions regarding the solicitation are asked earlyon by submitting questions about the RFP to the buying team.

The seller should ensure that the best and final proposal has been reviewed, over and over i t k t i th t it’ th b t d t th t it b d th t k id tifi d i b l again, to make certain that it’s the best product that it can be and that weaknesses identified in verbal

discussions have been addressed.

10Reference Text pgs. 20–21

Page 11: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Exercise

Q&A

1 Wh t d id t b i ti ’ b i / lli t th ?

Q&A

1. What do you consider to be your organization’s buying/selling strengths?

2. What do you consider to be your organization’s buying/selling weaknesses?a do you o s d o b you o ga a o s buy g/s g a ss s

3. On a scale of 1 (low/poor performance) to 10 (high/excellent performance), how do you rate your organization’s ability to efficiently and effectively manage the y y g y y y gbuying and selling life cycle?

11

Page 12: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

UNIT 2

PRE-BID/PROPOSAL PHASEPRE-BID/PROPOSAL PHASEProcurement Planning, Solicitation Planning, and Preparation

12

Page 13: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Purchasing Studies

Cross Industry BenchmarksTable 2-1Center for Advanced Purchasing Studies (CAPS) Research Report of Cross-Industry Benchmarks (May 2006)

Aerospace

Cross-Industry Benchmarks

Benchmark Cross-IndustryAverage

TelecommunicationsAverage

Aerospaceand Defense

Average

Purchase Spend as a Percent of Sales $ 43.69% 43.46% 44.77%

Purchase Operating Expense as a Percent of 0 39% 0 24% 1 05%Purchase Operating Expense as a Percent of Sales Dollars 0.39% 0.24% 1.05%

Purchasing Operating Expense per Purchasing Employee $110,320 $124,908 $120,238

Percent Spend Managed by Purchasing 80.62% 76.31% 93.28%

Percent of Companies Outsourcing Some of their Purchasing Activities 29% 30% 30%

Active Suppliers Accounting for 80% of Purchase Spend 6.46% 1.73% 4.79%

P t f A ti S li h Percent of Active Suppliers who are e-Procurement Enabled 11.16% 8.53% 8.42%

Percent Purchase Spend via E-Procurement 16.45% 7.00% 5.65%

Percent of Purchase Spend with Diversity Suppliers 9.63% 7.27% 12.69%

13

Suppliers

Reference Text pg. 29

Page 14: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

The Buying and Selling Life Cycle

Buyer Step 3Solicitation Preparation

Seller Step 1Pre-sales Activities

Buyer Step 2Solicitation Planning

Pre-bid/Proposal Phase

Buyer Step 1Procurement Planning

Seller Step 2Bid/No-Bid

Decision-Making

B &

THE BUYING AND SELLING LIFE CYCLE

Seller Step 3Bid/Proposal Developments

Buyer & Seller Step 7

Contract Administration &

Closeout

Bid/Proposal Phase

Post-bid/Proposal Phase

Buyer & Seller Step 6

Contract Negotiation &

Buyer

Seller Step 4Bid/Proposal

Reviews & ApprovalsSeller Step 5Verbal Presentation & Response to Questions

gFormation

14Reference Text pg. 30

SellerBuyer & Seller

Buyer Step 5Source-Selection Evaluation

Page 15: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Buyer Step 1

Procurement Planning ProcessProcurement Planning Process

Inputs Tools + Techniques Outputs

Similar past performance work

Outsource analysis Procurement management planperformance work

statements (PWS), statements of objectives (SOO), or solicitations

Market Research

Expert judgment

E-procurement +

management plan

Seller participation and feedback

Procurement resources

Market conditions

Business constraints

contracting methods

Contract type or pricing arrangements

Business constraints

Business assumptions

15

Adapted from World-Class Contracting, by Gregory A. Garrett, CCH, Inc., 2006.

Reference Text pg. 30

Page 16: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

E-Procurement and Contracting Methods

Table 2-1Two Approaches to Contracting

Competitive Noncompetitive

Simplified Purchase agreements Imprest funds or petty cash

Purchase agreementsp p y

AuctioningNet marketplacesVertical exchangesHorizontal exchangesHorizontal exchangesWeb portals

Formal Sealed biddingPrivate exchanges

Sole-source negotiationsSingle-source negotiationsPrivate exchanges

Two-step sealed biddingCompetitive proposalsCompetitive negotiations

Single source negotiations

16Reference Text pg. 32

Page 17: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Sealed Bidding vs. Two-Step Sealed Bidding

Buyer makes solicitation Seller submits technical

Two-StepSealed Bidding

Sealed Bidding

Buyer makes solicitationfor firm bids

Seller submits technicalproposal, and managementand company qualificationinformation

After deadline, buyerevaluates bids

Buyer evaluates everythingexcept pricing informationto determine which sellersare qualified

Two

Buyer requests pricinginformation fromqualified selles

One Step

Steps

Buyer chooses sellerbased on qualificationsand bid price

Buyer chooses seller(usually lowest bidder)

17Reference Text pg. 36

and bid price

Page 18: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Comparison of Contracting Methods

Noncompetitive Single-Source or

Sole-Source NegotiationCompetitive Proposals

or Negotiation

Requirement

Competitive Bidding

R i t R i tRequirement

Planning

Requisition

Requirement

Planning

Requisition

Requirement

Planning

Requisition

Request for proposals

Sellers

Invitation for bids

Sellers

Proposals

Technical proposal analysis Cost proposal analysis

Sealed Bids

Bid opening

Proposal

Final evaluation and selection

Discussions/negotiations

Short listResultsResults

Evaluation or two-step evaluationDiscussions/negotiations

18Reference Text pg. 39

Award of contract

Performance

Final evaluation and selectionp

Award of contract

PerformanceAward of contract

Performance

Page 19: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Contract Categories and Types

Table 2.1 Contract Categories and Types

Fixed Price Cost Reimbursement or Unit Price

Time and Materials

s

Firm-fixed price

Fixed price witheconomic price

Cost reimbursement

Cost-plus-a-percentage-of cost

Time and materials

Unit price

f C

ontr

acts

economic price adjustment

Fixed-price incentive

of cost

Cost-plus-fixed fee

Typ

es o

f

Cost-plus-incentive fee

Cost-plus-award fee

19Reference Text pg. 40

Page 20: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Best Practices15 Actions to Improve Your Use of Contract Incentives

These best practices should be followed when using incentive contracts:

15 Actions to Improve Your Use of Contract Incentives

1. Think creatively—creativity is a critical aspect in the success of performance-based incentive contracting.

2. Avoid rewarding sellers for simply meeting contract requirements.

3. Recognize that developing clear, concise, objectively measurable performance incentives will be a challenge, and plan accordingly.

4. Create a proper balance of objective incentives—cost, schedule, and quality 4. Create a proper balance of objective incentives cost, schedule, and quality performance.

5. Ensure that performance incentives focus the seller’s efforts on the buyer’s desired objectives.

6. Make all forms of performance incentives challenging yet attainable.

7. Ensure that incentives motivate quality control and that the results of the seller’s quality control efforts can be measured

20Reference Text pg. 52

quality control efforts can be measured.

Page 21: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Best Practices15 Actions to Improve Your Use of Contract Incentives

8. Consider tying on-time delivery to cost and/or quality performance criteria.

15 Actions to Improve Your Use of Contract Incentives

9. Recognize that not everything can be measured objectively—consider using a combination of objectively measured standards and subjectively determined incentives.

10. Encourage open communication and ongoing involvement with potential sellers in 10. Encourage open communication and ongoing involvement with potential sellers in developing the performance-based SOW and the incentive plan, both before and after issuing the formal request for proposals.

11. Consider including socioeconomic incentives (non-SOW-related) in the incentive plan.11. Consider including socioeconomic incentives (non SOW related) in the incentive plan.

12. Use clear, objective formulas for determining performance incentives.

13. Use a combination of positive and negative incentives.13. Use a combination of positive and negative incentives.

14. Include incentives for discounts based on early payments.

15. Ensure that all incentives, both positive and negative, have limits.

21Reference Text pg. 52

15. Ensure that all incentives, both positive and negative, have limits.

Page 22: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Range of Contract Types and Risk

Types of Contracts

Fixed price T&M* C t i b t

FFP CPFFFP/ FPI CST&M CPIF CPAFCR CPPC

Fixed price T&M* Cost reimbursement

HighLow Buyer’s risk

FFP CPFFFP/EPA

FPI CST&M CPIF CPAFCR CPPC

LowHigh Seller’s risk

*T&M contracts typically involve higher levels of risk for buyers.

= CPPC contract type is illegal in U.S. government contracting

22Reference Text pg. 57

Page 23: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Procurement Planning

D i d O t t

Th f h l i i f h f ll i i

Desired Outputs

The outputs from the procurement planning process consist of the following items:

Acquisition plan or procurement management plan: This plan should describe how the remaining procurement processes (from solicitation planning through contract closeout) will be managed The following are examples of questions to ask in developing closeout) will be managed. The following are examples of questions to ask in developing the procurement management plan:

What types of contracts will be used?

If independent estimates will be needed as evaluation criteria, who will

prepare them and when?

If standardized procurement documents are needed, where can they be found?If standardized procurement documents are needed, where can they be found?

How will multiple providers be managed?

23Reference Text pg. 57

Page 24: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected InterviewRene G RendonRene G. Rendon

Job Title: Professor

Organization: Naval Postgraduate School

Location: Monterey, California

Major Responsibilities: Teach program management and contract management courses in MBA programs

Background: 22 years of Air Force acquisition management. Bachelor’s, master’s, and doctorate degree in business administration.

24Reference Text pg. 59

Page 25: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

Rene G Rendon

QUESTIONWhat do you consider to be the top five seller best practices for developing a winning bid

Rene G. Rendon

What do you consider to be the top five seller best practices for developing a winning bid or proposal?

ANSWER

Use an integrated team effort.

Use a solicitation compliance matrix to ensure compliance with the solicitation requirements.q

Conduct a competitive analysis report to assess yourself against competitors.

Review past proposals that were successful and those that were not successful as a means of improving the proposal development processmeans of improving the proposal development process.

Use an external review team to evaluate the proposal before submission to the buyer.

25Reference Text pgs. 60

Page 26: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

Rene G RendonRene G. Rendon

QUESTIONHow can U.S. government agencies truly streamline and improve their source-selection process?process?

ANSWERUse electronic source-selection tools that will automate the paper process; educate and train source-selection personnel to ensure they have the appropriate knowledge, skills,

d biliti t d t b t l l ti M i t i d f and abilities to conduct best-value source selections. Maintain a cadre of source-selection experts to augment source-selection teams.

26Reference Text pgs. 60-61

Page 27: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Buyer Step 2

Solicitation Planning

Inputs Tools +T h i Outputs

Solicitation Planning

Inputs Techniques Outputs

Procurement managementplan

Standard forms

Expert judgment

Procurement documents

plan

Statement of work, performance work statement, or

Expert judgment Evaluation criteria

Statement of work updates

statementof objective

Other procurementplanning output

Due diligence

planning output

27Reference Text pg. 61

Page 28: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Buyer Step 3

Solicitation Preparation

Inputs Tools + Techniques Outputs

Solicitation Preparation

Inputs Tools + Techniques Outputs

Procurement documents

Seller focus groups, meetings, conferences, or Web-

Solicitation that leads to submission of quality bids or

Qualified seller lists,

based surveys

Advertising

Solicitation review(s)

q yproposals from qualified sources

Solicitation review(s)

Request for Information (RFI)

Draft request for proposal (RFP)

Understanding the seller’s perspective

28

seller s perspective

Reference Text pg. 66

Page 29: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Straight Talk

Suggestions for Significant Improvement

In both the public and private business sectors, buyers are usually in a rush to get something they need and they often want it badly As a result buyers often get what they

Suggestions for Significant Improvement

something they need, and they often want it badly. As a result, buyers often get what they want—however, it is often delivered late, over budget, does not meet their customer/user expectations, requires more service than expected, requires more upgrades than planned, and has a higher life-cycle cost than expected.

Thus, the buyers first three steps discussed in this unit must be properly staffed in both quality and quantity of resources with realistic schedules that should be mutually developed.

Buyers should conduct market research; should seek and obtain seller’s feedback via seller focus groups, meetings, or conference; use request for information; draft solicitations and appropriate means, using the appropriate communication technologies, such as Webinars, teleconferences and videoconferences etc teleconferences, and videoconferences, etc.

Further, buyers must stop vendor-bashing suppliers and create real partnerships in order to maximize the opportunities for everyone involved in the buying and selling life cycle.

29Reference Text pg. 69

Page 30: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Exercise

Q&AQ&A

1. On a scale of 1 (low/poor performance) to 10 (high/excellent performance), how effectively does your organization conduct procurement and solicitation planning?

2. Does your organization have the number of skilled resources needed to effectively conduct the procurement and solicitation planning steps?

3. How well does your buying organization review solicitations for clarity, accuracy, and brevity before submission to potential sellers?

30

Page 31: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

UNIT 3

PRE-BID/PROPOSAL PHASEPRE BID/PROPOSAL PHASEPre-sales Activities and Bid/No-Bid Decision-Making

31

Page 32: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

The Buying and Selling Life Cycle

Buyer Step 1

Buyer Step 2Solicitation Planning

Buyer Step 3Solicitation Preparation

Seller Step 1Pre-sales Activities

Pre-bid/Proposal Phase

Buyer Step 1Procurement

PlanningSeller Step 2Bid/No-Bid

Decision-Making

THE BUYING AND SELLING LIFE CYCLE

Seller Step 3Bid/Proposal Developments

Buyer & Seller Step 7

Contract Administration &

Closeout

Bid/Proposal Phase

Post-bid/Proposal Buyer Step 4Source Selection Planning

DevelopmentsCloseout

Buyer & Seller Step 6

Phase Source-Selection Planning

Seller Step 4Bid/Proposal

Reviews & ApprovalsSeller Step 5

Seller Step 6Contract

Negotiation & Formation

BuyerS ll

32Reference Text pg. 72Buyer Step 5

Source-Selection Evaluation

ppVerbal Presentation & Response to Questions

SellerBuyer & Seller

Page 33: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Seller Step 1

Pre sales Activities ProcessInputs Tools + Techniques Outputs

K l d f Q lifi d

Pre-sales Activities Process

Knowledge of yourcustomer

Knowledge of your company

Qualify opportunity and risk Opportunity–risk assessment grid

(ORAG) ORAG with bid/no-bid line

Elements of oppo t nit

Qualified opportunity

Competitor profile

Win strategy Knowledge of your

competitors

Elements of opportunity Elements of risk Opportunity quantification tool Risk quantification tool Gather competitive intelligence

Win strategy

Outline of offer–Stakeholders

review presentation Gather competitive intelligence

Competitor profile Sources of competitive intelligence Develop win strategy Sweet spot-sour spot analysisp p y Win theme and strategy form Customer positioning plan Customer contact plan Outline the opportunity

33Reference Text pg. 73

Stakeholder presentation outline

Page 34: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

The Three Inputs of Knowledge

Knowledge of your customer

Knowledge of your

Opportunity

34Reference Text pg. 74

Knowledge of your competitors Knowledge of your company

Page 35: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Opportunity–Risk Assessment Grid

High OpportunityLow Risk

High OpportunityHigh Risk

Hig

h 16

0Low Risk High Risk

ty BID

Opp

ortu

nit

120

BID

L O t it L O t it

NO BID

Low OpportunityLow Risk

Low Opportunity High Risk

Ri kHigh 160120Low 40

Low

40

35Reference Text pg. 78

Risk

Page 36: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Elements of Opportunity and Elements of Risk

Elements of Opportunity Elements of Risk

Corporate Direction Match Customer Commitmentp

Competitive Environment Corporate Competence

Revenue Value External Obstacles

Potential Profitability Opportunity Engagement

In-House Content Solution Life-Cycle Match

Future Business Potential Period of Performance

Resources to Bid Delivery Schedule

b b l dProbability to Success Resource Coordination

Collateral Benefit Nonperformance Penalties

Overall Strategic Value Overall Feasibility

36Reference Text pg. 79

Overall Strategic Value Overall Feasibility

Page 37: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Opportunity Quantification Tool

OPPORTUNITY ELEMENT

SCORE WEIGHT WEIGHTED SCORE

1 2 3 4

Core Business/Corporate Direction

Counter to core business and corporate direction

Neutral to core business and corporate direction

Partially aligned to core business and corporate direction

Fully aligned to core business and corporate direction

6

Competitive Environment

Competitor is clear leader and is favored by customer

Customer favors the competitor and is neutral to your company

No clear leader and customer has no supplier preference

Your company is clear leader and is favored by customer

5

Revenue Value Greater than $500K Between $500K and $2.5M Between $2.5M and $5M Over $5M4

Potential Profitability is negative or Profitability is between 0- Profitability is between 50- Profitability is over 100% Potential Profitability

Profitability is negative or break even

Profitability is between 050% of corporate requirements

Profitability is between 50100% of corporate requirements

Profitability is over 100% of corporate requirements 4

In-House Content

Less than 50% of content is from your company

Between 50%–75% of content is from your company

Between 75%–90% of content is from your company

Over 90% of content is from your company 4

Future Business Little or no connection to Possible link to future Likely link to future Assured or mandatory link Future Business Potential

Little or no connection to future business

Possible link to future business

Likely link to future business

Assured or mandatory link to future business 3

Resources to Bid Will significantly drain resources working on other opportunities

Will drain some resources working on other opportunities

Will have little or no impact on resources working on other opportunities

Will use resources currently underutilized 3

Probability of Success

Probability of success is near zero

Probability of success is less than 50%

Probability of success is over 50%

Success is almost certain3Success near zero than 50% over 50%

Collateral Benefit Little or no benefit to other projects or new company skills

Some benefit to either other projects or new company skills

Some benefit to both other projects and new company skills

Significant benefit to other projects or new company skills

3

Overall Strategic Value

It is of low importance that your company win this business

It is somewhat important that your company win this business

It is of high importance that your company win this business

It is critical that your company win this business

5

37Reference Text pg. 83

business business business business

TOTAL WEIGHTED OPPORTUNITY SCORE

Page 38: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Case Study

IBM (Global Services)IBM (Global Services)

To help mitigate business risks, IBM seeks not only to understand their customer’s business situation, but to influence the customer’s selection process by which they purchase products and/or services.

At IBM Global Services, they have an old saying “no blind bids,” which means IBM wants to always know the customer’s needs, risks, and opportunities before a solicitation document (i.e., invitation to bid, request f l t ) i i d b tfor proposal, etc.) is ever issued by a customer.

At IBM, opportunity and risk assessment is a proven best practice and an essential part of their business processes.p p

38Reference Text pg. 84

Page 39: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Risk Quantification ToolRISK ELEMENT SCORE WEIGHT WEIGHTED

SCORE1 2 3 4

Customer Commitment

Customer has assigned budget and personnel

Customer has assigned budget but not personnel

Customer has assigned personnel but not budget

Customer has not assigned personnel or budget

6

Corporate Complete replication of More than 50% replication of Less than 50% replication No replication of past Corporate Competence

Complete replication of past projects done by your company

More than 50% replication of past projects done by your company

Less than 50% replication of past projects done by your company

No replication of past projects done by your company

5

External Obstacles

No obstacles exist that are outside control of customer

Some obstacles—customer is actively working to address each

Some obstacles—customer has plan to address each

Significant obstacles—customer has no plan developed to address each

4

Opportunity Your company developed Your company guided Your company provided Our company had no Opportunity Engagement

Your company developed requirements for the customer

Your company guided customer in development of requirements

Your company provided comments after requirements were developed

Our company had no involvement in developing requirements 4

Solution Life-Cycle/Match

All requirements can be met by mature, released projects

Less than 30% of products will be pre-released or new products

Between 30%-70% of products will be pre-released or new products

70% of products will be pre-released or new products

4

P i d f C t t i f l th i C t t i b t i C t t i b t C t t i th Period of Performance

Contract is for less than six months

Contract is between six months and one year

Contract is between one year and three years

Contract is over three years 3

Delivery Schedule

Delivery schedule is flexible and will be set by your company

Delivery schedule to be negotiated by customer and your company

Delivery schedule is fixed, but no penalties for missed dates

Delivery schedule is fixed and penalties exist for missed dates

3

Resource Coordination

Need to coordinate less than five groups in your

Need to coordinate five or more groups in your company

Need to coordinate company groups and up to t t id li

Need to coordinate company groups and th t id 3company two outside suppliers three or more outside suppliers

3

Nonperformance Penalties

No penalties for nonperformance

Penalties to be negotiated between customer and your company

Fixed monetary penalties for nonperformance with a limit

Fixed monetary penalties for nonperformance with no limit

3

Overall Feasibility/Risk

Project is feasible and risks are manageable

Peroject is feasible but risks require mitigation

Project has some elements that are questionable but

Project has questionable feasibility and very high 5

39Reference Text pg. 85

risks can be mitigated risks

TOTAL WEIGHTED RISK SCORE

Page 40: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Competitor Profile

RANK Competitor or Competing

Solution Being Bid

Strengths of Competitor and

Weaknesses of Competitor and p g

Teamp

Solutionp

Solution

1

2

3

4

5

40Reference Text pg. 86

Page 41: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Sources of Competitive Intelligence

Sources of Competitive Intelligence

Public press releases,P bli W b iPublic Web sites,Public brochures,Public advertisements,Articles in trade publications,Past bids by your company to this customer,Past bids by your company to similar customers,Customer list of companies requesting solicitation,*Customer conversations,*Customer events and meetings,*Trade or industry associations, andCompetitive research or analysis companies.

* Which do not violate your company’s or competitor's rules on disclosure.

41Reference Text pg. 87

Page 42: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Sweet Spot–Sour Spot Analysis

Sour spot

Our weaknesses CompetitorstrengthsMitigate our weaknesses

STRATEGY

Neutralize their strengths

STRATEGY

Sweet Spot–Sour Spot AnalysisA Bidder’s Dozen: Golden Rules for Winning Work David G. Pugh, Ph.D

Customer needs

Winning Work David G. Pugh, Ph.D —Lore International Institute

Our strengthsCompetitor

kHighlight our strengths Ghost their weaknesses

Our strengths weaknessesSTRATEGY STRATEGY

42Reference Text pg. 88

Sweet spot

Page 43: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Win Themes and Strategies

Win Themes and Strategiesg

Win themes:

hStrategies to maximize our strengths:

Strategies to minimize our weaknesses:

Strategies to neutralize competitor's strengths:

St t i t h t tit ' kStrategies to ghost competitor's weaknesses:

43Reference Text pg. 90

Page 44: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Customer Positioning Planner

Customer Positioning PlannerC t C t R l P i S d F f C t t *Customer Position

Customer Name

Role PrimaryContact

Secondary Contact

Frequency of Contact *

Decision-Maker

Influencer Phone Call Personal Meeting

Dinner Entertainment

*Weekly, Bi-Weekly, Monthly, As-Needed

44Reference Text pg. 91

Page 45: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Customer Contact Planner

Customer Contact Planner

Customer: Prepared by: Date:

Date Event Purpose Objective(s) Customer Participants Your Company’s Participants

45Reference Text pg. 91

Page 46: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Desired Outputs

At the completion of the pre-sales activities step, you should have:

A qualified opportunity,

Competitor profile,

Win strategy, and

An outline of the offer for stakeholder opportunity review.

46

Page 47: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

Wayne E. Ferguson

Job Title: Manager, Contracts and Expert Compliance Officer

Organization: CAE USA Inc.

Location: Tampa, Florida

Major Responsibilities: Management and administration of all CAE USA contracts.

Background: BS in Management and MBA in Management, both from Wright State University, Dayton, Ohio. Former USAF “Copper Cap” at Wright Patterson Air Force Base, Ohio. More than 20 years of experience both as a USAF civilian procurement contracting officer and in industry.

47Reference Text pgs. 95-96

Page 48: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

QUESTIONWhat actions do you suggest sellers take to ethically and appropriately influence a buyer’s

Wayne E. Ferguson

a a o do you ugg a o a y a d app op a y u a buyrequirements?

ANSWERHave the “marketers” coordinate early with their contracts personnel and follow the “letter of the Have the marketers coordinate early with their contracts personnel and follow the letter of the law” regarding influence attempts. Establish an atmosphere of trust and mutual respect with the customer.

QUESTIONQUESTIONWhat actions should sellers take to ensure they make intelligent bid/no-bid decisions on their critical deals?

ANSWERANSWERDo not “chase” every opportunity—look at those opportunities that match the seller’s “core” business plans/competencies and stick with them. Have a formal bid/no-bid process and follow it.

48Reference Text pg. 96

Page 49: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

QUESTIONWhat do you consider to be the top five seller best practices for developing a winning

Wayne E. Ferguson

What do you consider to be the top five seller best practices for developing a winning bid or proposal?

ANSWER

Read and follow the RFP requirements “to a T.”

Get to know the buyer's and the users' real needs and attempt to roll these into the proposal.p p

Establish a formal proposal team if one does not exist in the organization, and written processes/procedures for the team.

Aim the proposal at the RFP requirements—do not include "fluff" in the proposal.

Be timely in every action taken.

49Reference Text pg. 96

Page 50: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Seller Step 2

Bid/No Bid Decision Making ProcessBid/No-Bid Decision-Making Process

Inputs Tools + Techniques Outputs

Qualified opportunity Outline of offer—

Stakeholder opportunity review

t ti

Bid/no-bid decision-makingOutline of offer

stakeholder review Presentation Introduction Customer profile

presentation Stakeholder

opportunity review outline Tips for an effective

Alignment on strategy Resource

commitment Escalation supportp

Opportunity profile Competitor profileWin strategy Issues and concerns

Tips for an effective stakeholder review Escalation support

Stakeholder opportunity review package Capture core teamIssues and concerns

Response requirements Bid/no-bid decision-

making

p

50Reference Text pg. 97

Page 51: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Exercise

Q&AQ&A

1. On a scale of 1 to 10, how well does your organization qualify opportunities, gather competitive intelligence, develop win strategies, develop customer positioning plans, p g p ,and obtain stakeholder buy-in to pursue opportunities?

2 H ff i l d i i lk f i i ? 2. How effectively does your organization walk away from poor opportunities?

51

Page 52: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

UNIT 4

BID/PROPOSAL PHASEBID/PROPOSAL PHASEBid/Proposal Development and Reviews/Approvals

52

Page 53: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

The Buying and Selling Life CycleBuyer Step 2

Buyer Step 3Solicitation Preparation

Seller Step 1Pre-sales Activities

Buyer Step 2Solicitation Planning

Pre-bid/Proposal Phase

Buyer Step 1Procurement Planning

Seller Step 2Bid/No-Bid

Decision-Making

THE BUYING AND SELLING LIFE CYCLE

Seller Step 3Bid/Proposal

Developments

Buyer & Seller Step 7

Contract Administration &

Closeout

Bid/Proposal Phase

Post-bid/Proposal Ph

Buyer Step 4Source-Selection Planning

pCloseout

Buyer & Seller Step 6

Buyer

Seller

Phaseg

Seller Step 4Bid/Proposal

Reviews & ApprovalsSeller Step 5

Verbal Presentation &

Seller Step 6Contract Negotiation

& Formation

53Reference Text pg. 108

Seller

Buyer & Seller

Response to Questions

Buyer Step 5Source-Selection Evaluation

Page 54: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Seller Step 3Bid/Proposal Development Process

Inputs Tools + Techniques Outputs

Select a capture team Conduct a capture team kickoff Customer solution

Bid/Proposal Development Process

Select a capture team Draft a preliminary capture

project plan Draft a communication plan Review past lessons learned

and best practices

Conduct a capture team kickoff meeting

Execute the capture project plan Capture team status meetings Action item register Stakeholder status report

St keholde t t e ie o tline

Customer solution Design Pricing Delivery plan Risk mitigation plansand best practices Stakeholder status review outline

Develop solution Solution architecture Compliance matrix Solution linkage matrix Delivery plan

Business cases Customer proposal Executive summary Technical response Delivery response

Develop risk mitigation plans Sources of risk Ways of mitigating risks Risk mitigation plan Risk mitigation plan log

D l b i

Delivery response Pricing response Contractual response

Develop business case Business case scenarios Business case models Product and service profile Customer business case Common business case terms

54Reference Text pg. 109

Develop proposal Attributes of winning proposals

Page 55: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

John (Jack) A Bishop JrJohn (Jack) A. Bishop Jr.

Job Title: Director of Operations

Organization: Anteon Corporation (now General Dynamics Information Technology)

Location: Albuquerque, New Mexico

Major Responsibilities: Program management, contract management and administration, and business development

Background: Education—MS/MBA, Abilene Christian University/Webster University. Experience—Contracting Division Chief/PCO, USAF/Air Force Research Laboratory and Contracts Director, Information Systems Group, Anteon Corporation, Fairfax, VA.

55Reference Text pgs. 110

Page 56: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

John (Jack) A Bishop JrQUESTIONWhat actions should sellers take to ensure they make intelligent bid/no-bid decisions on their critical deals?

John (Jack) A. Bishop Jr.

their critical deals?

ANSWERPerform thorough due diligence concerning the procurement using all appropriate means. Authorize “capture managers” to recommend/make bid/no-bid determinations at any time prior to bid submittal. Ensure chasing the procurement is worth the B&P investment involved.

QUESTION QUESTION What do you consider to be the top five seller best practices for developing a winning bid or proposal?

ANSWERK h i ldKnow the requirement cold.Know buyer’s needs & wants.Don’t skimp on bid and proposal costs.Hire the right capture manager.Manage cost, quality, schedule to the “nth” degree.

56

Manage cost, quality, schedule to the nth degree.

Reference Text pg. 111

Page 57: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Capture Team Kickoff Checklist

Capture Team Kickoff ChecklistChecklist Agenda Topics Reference Documents Discussion

Leader

Introduction Purpose agenda limit

Capture manager

Purpose, agenda, limit Introduce team members

manager

Review Opportunity Customer profile Opportunity profile Competitor profile

Stakeholder opportunity review package Sales leader

p p Win theme and strategies Issues and concerns

Validate Capture Plan Work tasks Resources

Work breakdown structure (WBS) Organization breakdown structure (OBS) Responsibility assignment matrix (RAM)

Capture manager

Timeline Communication plans

Team leader roles and responsibilities Task list schedule Customer positioning and contact plans Project communication plan Change request plan Alert-jeopardy-escalation Plan

Review Proposal Development Plans Development process Production requirements Layout and assignments Proposal reviews

Proposal development checklist Proposal production checklist Proposal layout with assignments Pink team and red team checklists

Proposal manager

57Reference Text pg. 113

Action Items and Next Steps Action items Meeting schedule

Action item register Capture manager

Page 58: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Action Item Register

Status No. Issue Action Required Owner Due Date Severity Progress

58Reference Text pg. 116

Page 59: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Stakeholder Status Report

Capture Manager: Due Date:

Customer: Tracking #:

Opportunity:

R t D t L t R t N t R tReport Date: Last Report: Next Report:

Solution Assessment

Red Yellow Green Proposal Assessment

Red Yellow Green Budget Assessment

Red Yellow Green

Work tasks completed since last report

Work tasks due before next report

59Reference Text pg. 118

Page 60: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Holistic Compliance

DELIVERYTECHNICAL DELIVERYTECHNICAL

PRICING CONTRACTUAL

60Reference Text pg. 120

Page 61: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Compliance Matrix

Solicitation R f

Functional R i t

Compliance ExplanationReference Requirement

Full Partial None

61Reference Text pg. 121

Page 62: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Solution Linkage Matrix

Solicitation Reference

Functional Requirement

Solution Product/Service Individual Accountable for Solutionq /

Design Description Pricing Overall Linkage

62Reference Text pg. 121

Page 63: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Sources of Risk

Technical Risks Delivery Risks Financial Risks

Hardware design Material availability Reliability Changes in COGSerrors

Software design errors

Testing and modeling

Personnel availability

Personnel skills

Safety

Maintainability

Operations and support equipment availability

Changes in SG&A expenses

Changes in interest rates

Changes in exchange ratesTesting and modeling

Integration/interfacesafety

Requirement

Safety

Security

Environmental impact

Transportation

Training availability

Documentation accuracy

Changes in exchange rates

Pricing errors

Customer financial stabilityRequirement

changes

Fault detection

Operating

Communication problems

Labor strikes

Requirement changes

Documentation accuracy

Zoning-regulatory approval

Degree of concurrency

Supplier financial stability

Contractual Risks

environment

Unproven technology

System complexity

Subcontractor stabilityNumber of critical path items

Terms and conditionsSupplier contracts

63Reference Text pg. 122

Page 64: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Ways of Mitigating or Avoiding Risk

Portfolio Risks Operational Risks

Share risks by having partners Hire contractors under turnkey contracts

Spread risks over time Tailor risk-sharing contract clauses

P ti i t i t U f t i b ild d if d iParticipate in many ventures Use safety margins; overbuild and overspecify designs

Group complementary risks into portfolios Have backup and redundant equipment

Seek lower-risk ventures Increase training

Specialize and concentrate in a single, well-known area Operate with redirect and bail-out options

I th ' it li ti C d t t t il t d t i lIncrease the company's capitalization Conduct tests, pilot programs, and trials

Commodity Prices Analysis Risks (Reducing Evaluation Error)

Hedge or fix in the futures markets Use better techniques (i.e., decision analysis)

Use long- or short-term sales (price and volume) contracts Seek additional information

Tailor contracts for risk-sharing Monitor key and indicator variables

Interest rate and exchange rate Validate models

Use swaps, floors, ceilings, collars, and other hedging instruments

Include evaluation practices along with project post-reviews

Restructure the balance sheet Develop redundant models with alternative approaches and people

Denominate or index certain transactions in a foreign currency

Involve multiple disciplines, and communicate cross-discipline

Environmental Hazards Provide better training and tools

64Reference Text pg. 123

Buy insuranceSource: Schuyler, John R. “Decision Analysis in Projects: Summary and Recommendations.” PM Network, October 1995.Develop and test an incident response program

Page 65: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Risk Mitigation Plan

Opportunity: Tracking #:

Risk Name: Risk #:

Developed by: Title: Date:Type of Risk Technical Delivery Pricing Contractual

Briefly describe the risk, its probability, and its impact:

Miti ti St t A id T f Sh RMitigation Strategy Avoid Transfer Share Reserve

Briefly describe the mitigation strategy:

Mitigation Plan Owner: Title:

65Reference Text pg. 125

Page 66: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Business Case Models

Item Year Total

1 2 3 4 51 2 3 4 5

# of Problems 1,500 2,500 2,000 1,000 1,000 8,000

Worst Case Scenario

% of problems solved 25% 25% 25% 0% 0%

# of solutions delivered 375.00 625.00 500.00 0 0 1,500

Most Likely Case ScenarioMost Likely Case Scenario

% of problems solved 35% 45% 55% 55% 55%

# of solutions delivered 525 1125 1100 550 550 3,850

Best Case Scenario

% of problems solved 50% 60% 70% 80% 90%

# of solutions delivered 750 1500 1400 800 900 5,350

66Reference Text pg. 127

# of solutions delivered 750 1500 1400 800 900 5,350

Page 67: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Attributes of a Proposal

Key Points Designed with Ease of Evaluation in Mind

A powerful executive summary Powerful proposal design

Audience designed Double exposure on a single page

1/3 visuals, 2/3 text, and ample white space Double or message column

Separately bound Themed and captioned

Customer-focused Emphatically written

Strategy-driven Active voice and personal pronouns

Benefits Rich (Answers “Why us?” and “So what?”) Effective organizationBenefits Rich (Answers Why us? and So what? ) Effective organization

Source: A Bidder's Dozen: Golden Rules for Winning Work, David G. Pugh, Ph.D. —Lore International Institute

67Reference Text pg. 130

Page 68: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Seller Step 4

Bid/Proposal Reviews & Approval Process

Inputs Tools + Techniques Outputs

Bid/Proposal Reviews & Approval Process

Customer solution

Design

Pricing

General actions

Why proposals lose evaluation points

Customer solution certified as “sound" and compliant

g

Delivery plan

Risk mitigation plans

Business cases

Pink team reviews

Pink team question checklist

Proposal deficiency form

Design

Pricing

Delivery

Risk mitigation plans Customer bid or

proposal

Executive summary

Technical response

Proposal deficiency log

Red team reviews

Red team question checklist

Risk mitigation plans

Business cases

Customer proposal reviewed and certified as

t d l tTechnical response

Delivery response

Pricing response

Contractual response

checklist

Red team evaluation form

Red team scoring form

Red team do's and don'ts

accurate and complete

Executive summary

Technical response

Delivery response

68

Obtain offer certifications

Offer certification form

y p

Pricing response

Contractual responseReference Text pg. 135

Page 69: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Why Proposals Lose Evaluation Points

Questionable or inadequate understanding of requirements or needs.

Incomplete response to the solicitation; critical sections left out of the proposal.Incomplete response to the solicitation; critical sections left out of the proposal.

Noncompliance with specifications; misinterpretation of the specifications.

Insufficient resources (time, funds, personnel, etc.) to accomplish the required services or tasksservices or tasks.

Insufficient information about the resources required for satisfactory performance under the contract.

Poor proposal organization; obstacles in correlating proposal content to the Poor proposal organization; obstacles in correlating proposal content to the solicitation or requirements.

Failure to show relevance of past experience to the proposed project.

Unsubstantiated or unconvincing rationale for proposed approaches or solutionsUnsubstantiated or unconvincing rationale for proposed approaches or solutions.

Wordiness. Mindboggling wordiness.

Repeating requirements without discussing how they will be performed.

69Reference Text pg. 136

Source: “Building a Contract: Solicitations/Bids and Proposals: A Team Effort?”

Page 70: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Proposal Evaluation Form

Opportunity:

Volume: Evaluator:Volume: Evaluator:

Evaluation Factor/Subfactor Excellent Good Average Poor Terrible Score Assigned

5 4 3 2 1

Organization and Emphasis

Win Themes and Strategies

Compliance and Responsiveness

Appearance and Presentation

Consistency and Brevity

Visuals

Totals

70Reference Text pg. 143

Totals

Page 71: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Exercise

Q&AQ&A

1. On a scale of 1 to 10, how well does your organization kickoff capture teams, develop bids, review bids, and obtain stakeholder approval to submit bids?

2. What actions has your organization taken to improve/develop skills for your sales managers, capture/proposal managers, and contract managers?

3 How well does your organization document and share your capture team kickoff 3. How well does your organization document and share your capture team kickoff, bid/proposal development, bid/proposal reviews, and approvals lessons learned?

71

Page 72: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Afternoon SessionAgenda

KEY TOPICS

Agenda

Case Study IT Managed Services

Unit 5 Bid/Proposal Phase: Source-Selection Planning and Evaluation

Unit 6 Post-bid/Proposal Phase: Contract Negotiation and Formation

Break

Case Study Best Advice

Unit 7 U S Federal Government Marketplace: Acquisition Planning Solicitations Unit 7 U.S. Federal Government Marketplace: Acquisition Planning, Solicitations, Bids/Proposals and Source Selection—Best Practices

Unit 8 U.S. Commercial Marketplace: Solicitations, Bids/Proposals, and Contracts—Best Practices

72

Best Practices

Summary

Page 73: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

UNIT 5

BID/PROPOSAL PHASEBID/PROPOSAL PHASESource-Selection Planning and Evaluation

73

Page 74: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

The Buying and Selling Life Cycle

Buyer Step 2Solicitation Planning

Buyer Step 3Solicitation Preparation

Seller Step 1Pre-sales Activities

Pre-bid/Proposal Phase

Buyer Step 1Procurement Planning

Seller Step 2Bid/No-Bid

Decision-Making

THE BUYING AND SELLING LIFE CYCLE

Seller Step 3Bid/Proposal Developments

Buyer & Seller Step 7

Contract Administration &

Closeout

Bid/Proposal Phase

Post-bid/Proposal Ph

Buyer & Seller Step 6

Buyer Step 4Source-Selection Planning

Buyer

Selle

Phase

Seller Step 4Bid/Proposal

Reviews & ApprovalsSeller Step 5

Verbal Presentation & Response to Q estions

Seller Step 6Contract Negotiation

& Formation

74Reference Text pg. 156

Seller

Buyer & Seller Buyer Step 5

Source-Selection Evaluation

Response to Questions

Page 75: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Buyer Step 4

Source Selection Planning ProcessSource-Selection Planning Process

Inputs Tools + Techniques Outputs

Bids or proposals Evaluation criteria

Bidder's conferenceWeighting system

Source-selection plan

Evaluation standards Source-selection

staffing

Screening system Independent estimates Source-selection process

75Reference Text pg. 157

Page 76: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Source-Selection Process

Request for Quote (RFQ) Process

Request for Quotation

Technical Proposal

Request for Proposal (RFP) Process

Request for Proposal

Cost and Technical Proposal

Evaluation

Final Technical and Cost Proposal

Evaluation

Evaluation

Clarifications

Award without Discussions Competitive Range

Selection

Notice to Unsuccessful Offerors

N ti ti

Award without Discussions

Notice to Unsuccessful Offerors

Debriefing

Competitive Range Determination

Notice to Offerors Outside Competitive Range

Verbal and Written Discussions Negotiation

Award

Debriefing

with all Offerors in Competitive Range

Request for Best and Final Offers

Best and Final Offers

Evaluation

Award

N ti t U f l Off

76Reference Text pg. 160

Notice to Unsuccessful Offerors

Debriefing

Page 77: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Eastman Kodak Sourcing Process

Identify a valid sourcing opportunity(outsourcing, resourcing,new sourcing, or insourcing).

Phase 0: Opportunity Identification Phase 1: Project DefinitionIdentify detailed requirementsto support the business case and enable project to move forward.

Phase 2: Supplier Qualification and Selection

Phase 3: Transition ReadinessIdentify and update all critical transition

Select the supplier best able tosatisfy the business case andrequirements document.

y pand implementation elements within EK and prepare to share them with the new supplier.

Phase 5: Pre-Production Verification

Share all critical transitionand implementation elementswith the new supplier to ensuretheir understanding.

Phase 4: Supplier Transition PlanningPhase 5: Pre Production VerificationObtain and evaluate pre-productionsamples of product and assesssupplier's overall performance againstbusiness case expectations.

Phase 7: Continuous ImprovementContinually improve financial, quality,and delivery performance.

Phase 6: Shipping ApprovalIdentify detailed requirementsto support the business case and enable project to move forward.

77Reference Text pg. 163

Phase 8: DiscontinuanceIf/When appropriate discontinueuse of a supplier.

Page 78: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

Rex Elliott

Job Title: Procurement Analyst/Contracting Officer

Rex Elliott

Organization: Program Procurement Division, NASA/Goddard Space Flight Center

Location: Greenbelt, Maryland

M j R ibiliti T i i d l d l t f t Major Responsibilities: Training and employee development for procurement workforce, workforce succession planning, professional certification, contracting officer warrants, employee awards, and contract terminations.

Background: Master of Arts in Public Policy, 1983—Rutgers University; Bachelor of g y, g y;Public Administration, 1981—Seattle University. 1983 Class of Presidential Management Interns. Twenty years of procurement operations experience (contracting with/for major system development, construction, R&D, institutional services, information technology, cooperative agreements, educational institutions, small businesses and large businesses etc ) and three years of procurement staff small businesses, and large businesses, etc.) and three years of procurement staff work (human capital management, legislation reviews, contract terminations, policy analysis, file reviews, and training seminars, etc.)

78Reference Text pg. 170

Page 79: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

Rex ElliottRex Elliott

QUESTIONHow can U.S. government agencies truly streamline and improve their source selection process?

ANSWERAs long as these agencies' management teams are so averse to protests, they will be very conservative about conducting and documenting very thorough proposal evaluations This often conflicts with the goals of streamlining or doing things efficiently evaluations. This often conflicts with the goals of streamlining, or doing things efficiently. That said, the only obvious choices for getting more streamlined source selections are to (1) develop a procurement workforce that's more knowledgeable about the specific industries and procurement strategies/techniques/pricing structures, etc. that are specific to those industries; or (2) reduce the perceived risk of protest by (a) assuring h l h h fi i l d h i i i (b) the government personnel that the firms involved have no interest in protesting, (b)

reducing the possibility of a firm filing a protest in the first place, or (c) increasing the negative consequences for firms filing frivolous protests.

79Reference Text pg. 172

Page 80: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Selected Interview

Rex ElliottRex Elliott

QUESTIONWhat do you consider to be some of the source-selection best practices typically used i th i l B i t ?in the commercial Business sector?

ANSWERI am a fan of verbal proposals. They’re usually quicker and result in better quality information being exchanged. I also like to see RFPs that are lean enough to focus on g g gonly the likely discriminators in a source selection (too many ask for information that won’t affect the source selection). I’m also a fan of selecting on the initial proposals,since that usually results in a selection decision that’s easier to make.

80Reference Text pg. 172

Page 81: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Buyer Step 5

Source Selection Evaluation ProcessSource-Selection Evaluation Process

Inputs Tools + Techniques Outputs

Bids or proposals Opportunity and risk Selected seller(s) who ill id ti l

Source-selection plan

Evaluation criteria

Evaluation standards

W i hti t

management (ORM) model

Past-performance evaluation database

Source-selection best practices checklist

will provide timely delivery of quality products, services, and/or solutions at a fair and reasonable price

Weighting system

Screening system

Source-selection process

practices checklist

Total cost of ownership (TCO) evaluation

Source-selection Decision-making guidelines

People

Training

making guidelines

Evaluation of verbal presentations by sellers

81Reference Text pg. 174

Page 82: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Opportunity and Risk Management (ORM) Model

Identify opportunities and risks

1

Model

Analyze opportunities and risks

2Opportunity/Risk Assessment

Prioritize opportunities and risks3

Develop opportunity and risk action plans

4

Implement opportunity and risk Opportunity/Risk Implement opportunity and risk action plans

5

Evaluate project results

Opportunity/Risk Action Plans

82

6

Reference Text pg. 177

Page 83: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Source Selection

Seven Best Practices Checklist

1. Cycle-Time Targets—The buyer establishes a target of 90 days or less fromissuance of the RFP to contract award.

Seven Best Practices Checklist

2. Greater Pre-solicitation Efforts—The buyer actively encourages more definitiveprocurement planning, bidders conferences with prospective sellers, and circulationof the draft RFPs to prospective sellers.

3 Proposal Page Limitations—The buyer provides that pages in proposals over a3. Proposal Page Limitations The buyer provides that pages in proposals over aspecified number will not be read, but will be returned to the seller.

4. Reduced Number of Evaluation Factors—The buyer uses only essential evaluationfactors.factors.

5. Small Source-Selection Teams—The buyer uses a small number of evaluators, each reading all of their specialization/section (technical, management, past performance, or cost) for the proposals.

6 V b l P t ti Th b i th ll t k b l 6. Verbal Presentations—The buyer requires the sellers to make verbal presentations to the source selection team in the early stages of evaluation of the proposals.

7. Limiting the Competitive Range—The buyer require rigorous exclusion of marginal sellers from the competitive range

83Reference Text pg. 178

marginal sellers from the competitive range.

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Seller Step 5 Verbal Presentations and Response to Questions ProcessVerbal Presentations and Response to Questions Process

Inputs Tools + Techniques Outputs

Bids or proposals Verbal presentations Professionally Bids or proposals

Source-selection

plan

People

Verbal presentations,

coaching, and training

Preparation and

response to buyer

Professionally

delivered verbal

presentation

Effective responses People

Training questions

Document lessons

learned/proposal

to buyer

bid/proposal

questions

debriefing

84Reference Text pg. 180

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Verbal Coaching Content

Essential SkillsSpeaking and presentation skills

Content development and organization

Customer profiling and analysis

Leade ship de elopmentLeadership development

Video taping and analysis

Credibility and presence development

Team cohesionTeam cohesion

Speech-writing and script presentations

Group practice coaching

Preparation of charts and graphics

One-on-one coaching

Question-and-answer preparation

Rapport-building skills

85Reference Text pg. 182

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Verbal Coaching Process

Quick study of the situation (RFP, customer needs, history of contract, and any special circumstances)

Assessment of individual and team capability

Development of presenters into a cohesive team

Video taping each presenter to determine initial strengths and weaknesses

Identification and emphasis of key discriminators

Designing a coaching plan and schedule

Monitoring the design of all charts and visualsMonitoring the design of all charts and visuals

Coaching for presentation at pink team

Conducting extensive team and one-on-one coaching with video feedback

Preparing for red teamPreparing for red team

Polishing presentations using video feedback

Finalizing plans for delivery to the source-selection board

86Reference Text pg. 183

Page 87: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

ExerciseQ&AQ&A

1. On a scale of 1 to 10, how effectively does your buying organization plan and prepare for large and complex source selections?

2. What actions has your buying organization take to streamline source selection?

3. Does your selling organization properly train team members to provide best-in-y g g p p y pclass verbal presentations?

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UNIT 6

POST-BID/PROPOSAL PHASEPOST BID/PROPOSAL PHASEContract Negotiation and Formation

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The Buying and Selling Life CycleBuyer Step 2

Solicitation Planning

Buyer Step 3Solicitation Preparation

Seller Step 1Pre-sales Activities

Pre-bid/Proposal Phase

Buyer Step 1Procurement Planning

Seller Step 2Bid/No-Bid

Decision-Making

THE BUYING AND SELLING LIFE CYCLE

Seller Step 3Bid/Proposal Developments

Buyer & Seller Step 7

Contract Administration &

Closeout

Bid/Proposal Phase

Post-bid/Proposal Ph

Developments

Buyer & Seller Step 6

Contract Buyer Step 4

Source-Selection Planning

Buyer

Selle

Phase

Seller Step 4Bid/Proposal

Reviews & ApprovalsSeller Step 5

Verbal Presentation &

Contract Negotiation &

Formation

Source Selection Planning

89Reference Text pg. 188

Seller

Buyer & Seller

Buyer Step 5Source-Selection Evaluation

Response to Questions

Page 90: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Buyer and Seller Step 6 Contract Negotiation and Formation ProcessContract Negotiation and Formation Process

Inputs Tools + Techniques Outputs

Solicitation (RFP, RFQ, etc.) Highly skilled contract negotiators

Contract or walk away

Bid or proposal

Buyer's source selection process

Legal review

Business case approval

Seller's past performance

Previous contracts

Contract negotiation

Formation process

Competitor profile business ethics/standards of conduct guidelines

Market and industry practices

Plan negotiations

Conduct negotiations

Document the

90

practices Document the negotiation and form the contract

Reference Text pg. 191

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Contract Negotiation Process

Plan the Negotiation Conduct the Negotiation Document the Negotiation + Form the Contract

Prepare yourself and your team

Know the other party

Determine who has authority

Prepare the facility

Prepare the negotiation memorandum

Send the memorandum to the other party

Know the big picture

Identify objectives

Prioritize objectives

Use an agenda

Introduce the team

Set the right tone

Offer to write the contract

Prepare the contractj

Create options

Select fair standards

Set the right tone

Exchange information

Focus on objectives

Prepare negotiation results summary

Obtain required reviews and approvals

Examine alternatives

Select your strategy, tactics, and countertactics

Use strategy, tactics, and Countertactics

Make counteroffers

Send the contracts to the other party for signature

Provide copies of the contract to affected o gani ations

91

Develop a solid and approved team negotiation plan Document the agreement or

know when to walk away

affected organizations

Document lessons learned

Reference Text pg. 195

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Team Members Strengths, Weaknesses, and Interests

TEAM MEMBER TEAM MEMBER

Name Name

Job Title Job Title

Phone No. Phone No.

Fax No. Fax No.

E-Mail E-Mail

Strengths StrengthsStrengths Strengths

1. 1.

2. 2.

3. 3.

Weaknesses Weaknesses

1. 1.

2. 2.

3. 3.

Interests Interests

1. 1.

2. 2.

3 3

92Reference Text pg. 196

3. 3.

DatePrepared:__________________________

LeadNegotiator:_______________________

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Things to Know About the Other Party

Buyer and Seller

1. What is the organization's overall business strategy?2. What is its reputation?p3. What is its current company business environment?4. Who is the lead negotiator?5. Who are the primary decision makers?6. What are their key objectives?y j7. What are their overall contract objectives?8. What are their personal objectives?9. Who or what influences the decision makers?10. What internal organization barriers do they face?g y

Seller Only

1. When does the buyer need our products or services?2 How much money does the buyer have to spend?2. How much money does the buyer have to spend?3. Where does the buyer want our products and services delivered?4. What benefits will our products and services provide?5. What is our company's past experiences with this buyer?

93Reference Text pg. 197

Date Prepared:_________________ Lead Negotiator:__________________

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Importance of Price

Schedule

Technology (research and development)

Customer obligations

Price ServicesContract type

T d CMi ll Ts and Cs

Products

Miscellaneous contracting elements

94Reference Text pg. 198

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Objectives Identification

SELLER OBJECTIVES BUYER OBJECTIVESPersonal Personal

1. 1.

2. 2.

3. 3.

4. 4.

5 55. 5.

6. 6.

7. 7.

Professional Professional

1. 1.

2. 2.

3. 3.

4 44. 4.

5. 5.

6. 6.

7. 7.

95Reference Text pg. 199

DatePrepared:________________________

Lead Negotiator:_____________________

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Importance of Ts and Cs

I ti d t

Payments

Inspection and acceptanceMiscellaneous Ts and Cs

Financing

Ts and CsCost, Risk,

d V lWarrantiesParts availability

FinancingDelivery terms

and Value

Spares Taxes

GuaranteesIndemnity

d li bilit

Exchange rate

96Reference Text pg. 200

and liability

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Objective Prioritization

1.

2.

3.

4.

5.

6.

7.

Date Prepared:__________________________ Lead Negotiator:___________________________

97Reference Text pg. 201

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Create Options for Achieving Negotiation ObjectivesObjectives

Seller Objectives Possible Options Buyer Objectives

Date Prepared:________________ Lead Negotiator:_______________

98Reference Text pg. 202

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Sample Negotiation Planning Summary

Negotiation Information

Location Date Time

1. 1. 1.

2. 2. 2.

3. 3. 3.

Key Objectives (Plot your most likely position)

1. PRICE Worst Case Best Case

2. PAYMENTS

payments

$10.5M $12.0M $12.5M

Worst Case Best Case

After Delivery Progress Payments Advancepayments

3. WARRANTY PERIODWorst Case Best Case

36 Months 18 Months 12 MonthsIndustry average

99Reference Text pg. 204

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Sample Negotiation Planning Summary continued Worst Case Best Casecontinued

4.

5.

6.

7.

Worst Case Best Case

Worst Case Best Case

Worst Case Best Case

Worst Case Best Case

7.

8.

9.

10.

Worst Case Best Case

Worst Case Best Case

Worst Case Best Case

11.

12.

Possible Tactics and Countertactics

Objective Planned Tactics—Buyer Planned Countertactics—Seller

Worst Case Best Case

Worst Case Best Case

Contract Price

Range

Best Case

Most Likely

Worst Case

100Reference Text pg. 205

Date Prepared:______________________________________ Lead Negotiator:_____________________________________

Approved by:_______________________________________ Date Approved:_____________________________________

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Negotiation Agenda

Contract

Title Date

Location Time

Topics of Action

Introduce team members

Provide overview and discuss purpose of negotiation

Time

___________________________________________

Provide overview and discuss purpose of negotiation

Exchange information on key interests and issues

Quality of products and services

Past performance

Delivery schedule

___________________________________________

___________________________________________

___________________________________________

Delivery schedule

Maintenance

Training

Have a break

Review agreement on all key interests and issues

__________________________________________

Review agreement on all key interests and issues

Agree on detailed terms and conditions

Agree on price

Review and summarize meeting

__________________________________________

__________________________________________

__________________________________________

__________________________________________

101

Date Prepared:_______________________________ Lead Negotiator:__________________________________

Reference Text pg. 207

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Negotiation Zone

LOW HIGH

Buyer’s Price Range

LOW HIGH

Seller A’s Price Range

LOW HIGH

Seller B’s Price Range

HIGHLOW

Seller C’s Price Range

102Reference Text pg. 208

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Negotiation Results Summary

Contract Title Date of ContractContract Title Date of Contract

Parties Involved Date(s) of Negotiation

Brief Product Description Location

Agreed to Price

Key Changes from Approved Proposal

Date Prepared:_______________________ Lead Negotiator:_______________________

103Reference Text pg. 216

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Checklist of Buyer

Contract Negotiation Best PracticesChecklist of Buyer

The Buyer Should:

Know what you want lowest price or best value? Know what you want—lowest price or best value?

State your requirements in performance terms and evaluate accordingly.

Conduct market research about potential sources before selection.

Evaluate potential sources promptly and dispassionately.

Follow the evaluation criteria stated in the solicitation—management, technical, and price.

Use absolute, minimum, or relative evaluation standards to measure performance as stated in your solicitation.

Develop organizational policies to guide and facilitate the source-selection process.

Use a weighting system to determine which evaluation criteria are most important.

Use a screening system to pre-qualify sources.

Obtain independent estimates from consultants or outside experts to assist in source selection.

Use past performance as a key aspect of source selection, and verify data accuracy. Use past performance as a key aspect of source selection, and verify data accuracy.

Conduct price realism analysis.

Create a competitive analysis report.

Use verbal presentations or proposals by sellers to improve and expedite the source-selection process.

104Reference Text, pg. 218

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Checklist of Buyer and Seller

Tips to Improve Negotiation ResultsChecklist of Buyer and Seller

The Buyer and Seller Should:

Understand that contract negotiation is a process, usually involving a team effort.

Select and train highly skilled negotiators to lead the contract negotiation process.

Know market and industry practices.

Prepare yourself and your team.

Know the other party.

Know the big picture.

Identify and prioritize objectives.

Create options—be flexible in your planning.

Examine alternatives.

Select your negotiation strategy tactics and counter-tactics Select your negotiation strategy, tactics, and counter tactics.

Develop a solid and approved team negotiation plan.

Determine who has the authority to negotiate.

Prepare the negotiation facility at your location or at a neutral site.

U d d i t t ti ti Use an agenda during contract negotiation.

Set the right tone at the start of the negotiation.

Maintain your focus on your objectives.

Use interim summaries to keep on track.

105

Do not be too predictable in your tactics.

Document the agreement throughout the process.

Reference Text pg. 219

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Tips to Improve Negotiation ResultsChecklist of Buyer and Seller

The Buyer and Seller Should: (cont.)

Checklist of Buyer and Seller

Know when to walk away.

Offer to write the contract.

Prepare a negotiation results summary.

Obtain required reviews and approvals.

Provide copies of the contract to all affected parties.

Document negotiation lessons learned and best practices.

P t iti l f t t d i i t ti Prepare a transition plan for contract administration.

Understand that everything affects price.

Understand that the Ts and Cs have cost, risk, and value.

Tailor Ts and Cs to the deal, but understand the financial effects on price and profitability. Tailor Ts and Cs to the deal, but understand the financial effects on price and profitability.

Know what is negotiable and what is not.

106Reference Text pg. 219

Page 107: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

ExerciseQ&AQ&A

1. How would you rate your organization’s typical contract negotiation preparation process?

2. How well do you plan, conduct, and document contract negotiations?

3. What areas of the contract negotiation process does your organization really need to improve?

107

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UNIT 7

U S FEDERAL GOVERNMENTU.S. FEDERAL GOVERNMENTAcquisition Planning, Solicitations, Bids/Proposals, and Source Selection—Best Practices

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U.S. Federal Government Functional Specialists

Participating in the Acquisition Planning Process

C i li / Contract specialist/manager

Budget analyst

Business manager

C fi ti Configuration manager

Financial analyst

Logistics manager

Contracting officer (CO) Contracting officer (CO)

Contracting officer's technical representative

(COTR)

Procurement attorney/lawyer Procurement attorney/lawyer

Program/project manager (PM)

Quality assurance representative (QAR)

Small business advocate

109

Small business advocate

Reference Text pg. 257

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U.S. Federal Government Marketplace

Best Practices—Acquisition Streamlining

Understand and focus on performance-based mission requirements.

Streamline acquisition strategy plan in view of time, technical risk, and cost.

Conduct market research and industry-focused meetings.

Use a statement of objectives (SOO) to obtain contractors d l i f d d i d li proposed solutions, performance standards, metrics, and quality

plan.

Encourage contractors to develop creative solutions.

Use strategic sourcing.

Specify system-level broad mission performance requirements at onset of development.

Challenge every detailed requirement.

Specify what results are required, not how to manage (all phases) or how to do it.

Use verbal presentations.

Pursue economically producible, operationally suitable, and field supportable designs (all phases).

110Reference Text pg. 259

Select the best-value partner.

Page 111: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

U.S. Federal MarketplaceBest Practices

Use of an Integrated Project Team (IPT) to Develop Objectives, Requirements, and Oversee the Acquisition Process

Best Practices

Objectives, Requirements, and Oversee the Acquisition Process

The creation of a true Integrated Project Team (IPT) is essential for a buyer to gather all of their organizations and end-user objectives, requirements, and guide the acquisition process. The IPT is typically

d f ltif ti l t i l di i t ti composed of a multifunctional team including senior representatives from:

End-customers Project/program management (PM)j /p g g ( ) Technical operations Supply-chain management Financial management/CFO Information management/CIO Contract management/purchasing Contract management/purchasing Legal

111Reference Text pg. 260

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U.S. Federal MarketplaceBest Practices

Use a Performance Work Statement (PWS) or Statement of Objectives (SOO)—a Solicitation Planning Best Practice

Best Practices

a Solicitation Planning Best Practice

The WBS is the management framework of the requirement, but it is not thedescription of the government's requirement. The WBS does not contain any of thetechnical, engineering or other specific requirements. Often the buyer will chooset t t t t f bj ti (SOO) d k ti ll t to create a statement of objectives (SOO) and ask prospective sellers to assessthe SOO and propose how they would do the work via a performance workstatement with appropriate standards, measures, metrics, and performanceincentives. The performance requirements are contained in the performance workstatement (PWS), which is a form of a statement of work (SOW).( ), ( )

Contract managers frequently encounter problems with incomplete SOWs. A well-planned PWS can clearly communicate all of the performance-based requirementsto the contractor. However, these requirements must also be clearly stated. Asthe complexity and dollar value of the contract requirement increases so does thethe complexity and dollar value of the contract requirement increases, so does theneed for a structured approach.

112Reference Text pgs. 260–261

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U.S. Federal MarketplaceBest PracticesBest Practices

Use the Work Breakdown Structure—A Solicitation Planning Best Practice

A work breakdown structure (WBS) is a tool for organizing, defining, and graphically displaying the product or service to be provided as well as the work to be accomplished to achieve the specified product or service to be provided, as well as the work to be accomplished to achieve the specified results. In preparing an RFP, an important step is to examine the government agency’s needs. A WBS can be the first step in establishing a management framework, which the government's requirements can be clearly identified. The WBS acts as the foundation for a management control system for both government and contractor project personnel. It organizes the project and provides a consistent and visible framework that

Provides an effective management and technical baseline for planning and assigning responsibilitieswithin the government and contractor organizations.

Structures the reporting process for progress and status reports.

Organizes the project as a whole and ensures consideration of total life cycle effects when makingsystem development and acquisition decisions.

Integrate the contractor's planning, scheduling, and budgeting with each other and with the contractwork breakdown structure (CWBS).

Integrate the CWBS with the contractor's organizational structure to permit cost and scheduleperformance measurement, via an earned value management system (EVMS).

Assign each direct cost from cost accounts into a single branch of the WBS.

Report data elements and variances (budgeted costs scheduled and performed, indirect costs, and

113Reference Text pgs. 261-262

cost variances) to the level specified in the contract.

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U.S. Federal MarketplaceBest PracticesBest Practices

Effectively Structure Contract Line Item Numbers—A Solicitation Planning Best Practice

In the RFP, Section B of the Uniform Contract Format describes the supplies or services to be delivered under the contract These items are referred to as contract line item numbers (CLINs) The structure under the contract. These items are referred to as contract line item numbers (CLINs). The structure and description of these items can have significant impact on both the government and the contractor. CLINs should be based on the work breakdown structure. The only effective way to determine exactly what the government requires is to analyze the work breakdown structure and then design the CLINs to match this structure.

114Reference Text pg. 263

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U.S. Federal MarketplaceBest PracticesBest Practices

Use Proposal Preparation Guidelines—A Solicitation Planning Best Practice

The portion of a solicitation upon which most contractors initially focus is the proposal preparation instructions located in Section L of the Uniform Contract Format. This section depicts the proposal format and content that the government desires.

Formatting Best Practices

The government can provide very specific or very general instructions on how it would like to see the contractor's proposal. For ease of evaluation and selection of the best contractor, however, the government must ensure that the proposals it receives contain the critical information in an appropriate g p p pp pformat. Solicitations should provide guidance to offerors regarding proposal page limitations, number of copies required, and the division of proposals into separate volumes on technical, management cost, and other criteria.

115Reference Text pg. 263

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U.S. Federal Government Marketplace

Solicitations Best Practices Checklist

Draft RFP—Providing industry with the most complete draft package possible and then allowing sufficient time to analyze industry's response and incorporate good ideas into the actual RFP helps create a clearer time to analyze industry s response and incorporate good ideas into the actual RFP helps create a clearer, more effective solicitation.

Electronic Submission of Solicitation Notices, Frequently Asked Questions and Answers, andIndustry Pre-solicitation Meetings—Can be used to identify interested sources and to explain complicated requirements to interested sources. They can reduce undue expenditures of time, effort, and moneymoney.

Amendments to Solicitations—If changes need to be made or ambiguities need to be corrected in a solicitation, a formal amendment can be issued to all prospective offerors.

RFP Tracking—An RFP is made up of many separate components: line items, statement of work, data requirements, proposal preparation instructions, and evaluation criteria, which have been prepared by a requirements, proposal preparation instructions, and evaluation criteria, which have been prepared by a variety of personnel. Therefore, it is extremely important to ensure that the parts constituting the whole, communicate a consistent message to prospective offerors.

Solicitation Review Board—Sometimes referred to as a "Murder Board," a solicitation review board is comprised of functional experts from outside the RFP process.

Executive Summary—A concise introductory letter that conveys the salient features of the solicitation. It normally will include a brief description of the program.

Verbal presentation(s)—The use of verbal presentations by contractors can facilitate better and more effectivedecision-making by the U.S. government.

116Reference Text pg. 264

g y g

Elimination or Limited Use of the Bid Protest Process—Details already provided in Chapter 5.

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Source Selection Best PracticesThe Common Framework

Performance Requirements

Work BreakdownStructure

(WBS)

The Common Framework

PerformanceWork

Statement(PWS)

Contract DataRequirements List

(CDRL)

ResponsibilitiesAssignment

Matrix(RAM)

MasterIntegratedSchedule

(MIS)

Quality AssuranceSurveillance Plan

(QASP)

Selection Criteria1. For Contractor2. For Proposed Product/Service/Solution

Evaluation Criteria

Requirements forSelectionProposal Preparation

Instructions

Budgeted ResourceRequirements/Performance

Contractor Plan/Qualifications

Proposed Product/Service

Technical Proposal Management Proposal Cost Proposal

117Reference Text pg. 267

Adapted from: NCMA, “Solicitations, Bids, & Proposal,” Seminar Manual, 1990.

Requirements/PerformanceBaseline

QualificationsService

Page 118: 2008 NES Presentation Solicitations, Bids, Proposals, And Source Selection)

Checklist Best-Value NegotiationsDos

Develop or obtain proven best-value pricing tools.

Select best-value measurement tools that are easy to understand and use.

Ensure quality factors do not become secondary to cost issues, except for

Dos

Ensure quality factors do not become secondary to cost issues, except fornoncomplex acquisitions.

Consider using automation tools for best-value decision-making.

Tailor best-value measurement tools to specific procurement situations, realizingthat complexity increases with the size and scope of the acquisition.

Use a contract type that fairly allocates risks.

Provide contract incentives for superior (quality) performance.

Implement guidance throughout the agency or company.

Continue to improve techniques.

Make each best-value decision a team effort among contracts, finance,engineering, production, quality assurance, and other related offices.

Ensure best-value approach supports the overall negotiation strategy.

Realize the best-value approach works only if you know what you’re buying.

Document the rationale for best value decisions Document the rationale for best-value decisions.

Allow flexibility for tradeoffs.

From Negotiating a Quality Contract, NCMA, 1992.

118Reference Text pg. 271

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Checklist Best-Value NegotiationsDon’ts

Don’t use (1) the low bid or (2) the lowest cost, technically acceptable offer oras a substitute for best value, when best value is applicable.

D ’t t t k d b t l d i i ith t l l d fi i

Don ts

Don’t expect to make a good best-value decision without clearly defining yourapproach up front.

Don’t attempt to implement best-value contracting without properly trainingacquisition personnel.

Don’t forget to research all relevant issues, especially technical factors.g , p y

Don’t make best-value decision tools unnecessarily complex.

Don’t allow for such practices as a “buy-in” or uncompensated overtime.

Don’t use auctioning, technical leveling, or technical transfusion techniques asa substitute for best-value contracting.g

Don’t forget to formalize the elements of the best-value agreement as soon aspossible after contract negotiation.

Don’t allow an offeror’s low initial price to overshadow life-cycle cost considerations.

Don’t expect to obtain the maximum level of economy when buying noncommercialoff-the-shelf items.

From Negotiating a Quality Contract, NCMA, 1992.

119Reference Text pg. 272

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ExerciseQ&AQ&A

1. On a scale of 1 to 10, how well does your organization conduct acquisition planning?

2. Does your organization implement all of the solicitation planning best practices contained within the units?

3. How effectively has your organization streamlined your buying/acquisition process?

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UNIT 8

U.S. COMMERCIAL MARKETPLACEU.S. COMMERCIAL MARKETPLACESolicitations, Bids/Proposals, and Contracts—Best Practices

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What Buyers Most Want from Sellers/Distributors

The following get top priority (on a scale of 1–10, with 10 the highest):

2006 2005

Quality 7.8 7.2

Price 6 9 5 8Price 6.9 5.8

Availability 6.5 4.6

Total cost 5.9 5.7

Service 5.2 5.7

Ease of doing business 3.3 NA

Brands carried 3.0 NA

Inventory assistance 2.1 3.6

E-commerce capability 2.1 NA

Technical assistance 1.9 3.7

Emergency assistance 1.3 NA

Source: Purchasing Survey (2005)

122

Source: Purchasing Survey (2005)

Reference Text pg. 275

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What Buyers Like About Sellers/Distributors

(Order of Responses)

1. Customer service

2. Geographic range of service

3. E-commerce capability

4. Range of products

5. Handling of delivery and lead time issues

123Reference Text pg. 275

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Buyers’ Biggest Problem with Sellers/DistributorsSellers/Distributors

(Order of Responses)

1. Product and technical knowledge

2. Cost

3. Availability

4. Relationships with manufacturer suppliers

5. Quality

Source: Purchasing Survey (2005)

124Reference Text pg. 276

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U.S. Commercial Best Practices to Improve Solicitations, Bids/Proposals, and Contracts

Use a contract management methodology.

Commit to a contract management professional development program.

Establish a list of pre-qualified suppliers Establish a list of pre-qualified suppliers.

Take advantage of electronic contract management software applications.

Use corporate credit cards.

Adopt value-based pricing when sensible.

Use universal sales agreements.

Conduct risk vs. opportunity assessment.

Simplify standard contract terms and conditions.

P it b l t ti f l Permit verbal presentation of proposals.

Employ highly skilled contract negotiators.

Conduct mock contract negotiations.

Adopt uniform solicitations, proposal, and contract format.

Create a paperless contracting process.

Use of key performance indicators (KPIs).

Implement strategic sourcing.

125Reference Text pgs. 276–278

Conduct market research.

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U.S. Commercial Best Practices to Improve Solicitations, Bids/Proposals, and Contracts

The most popular U.S. commercial procurement KPIs include:

Total indirect and direct spend

Percentage of spend managed thru procure-to-pay system

Percentage of invoices paid late Percentage of invoices paid late

Percentage of purchase orders (POs) generated after receipt of invoice

Number of active suppliers and percentage decrease

Discounts taken

POs and invoices per employee

126Reference Text pg. 279

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ExerciseQ&AQ&A

1. How many of the best practices discussed in this unit does your organization routinely practice?

2. What other commercial best practices does your organization practice?

3. How well educated and trained are your organization’s contract managers, sales managers, and/or purchasing managers in commercial contracting best practices?

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