Analysts have estimated that U.S. companies spend about $400 million per year in hiring proposal consultant services.  Investments in proposal consultant services range from as low as maybe $5,000 a year at a small business to tens of millions a year at the largest government contractor firms.

This article is written to provide some ideas as to how companies can purchase proposal consulting services at the lowest possible cost.  As the sequestration starts, never was it more important for a company to be able to purchase their proposal consulting help at highly competitive prices.

Two Techniques That Will Work Well in Saving Cost

Placing the Order in Advance
I was surprised to learn that even Fortune 50 companies often place orders for consultant service at the last minute.  In order to get the best price, companies need to discuss their requirements with the proposal consulting supplier as far in advance as possible.   Nearly every week, we receive orders for proposal consulting service “as soon as possible”.   We can usually provide consultants with responsive skills.  HOWEVER, we can’t do as good a job for these last-minute customers as we can for those who shared their requirements 2 weeks or 2 months in advance. 

It happens that we have a large pool of proposal consulting talent.  The pool includes 350 consultants who work for us on a regular basis; 800 consultants who have worked for us; and 5,500 consultant resumes. 

If we have significant advance notice, we can do two things that are not possible with last-minute orders:

  1. Have the time to select a consultant whose qualifications are closely aligned with the customer requirements
  2. 2.Have the time to select a consultant who is less costly from several different technically qualified options

If we have some time,  our large pool of time allows us to select the consultants who both best match the customer requirement and are lowest in fee.

 

Saving Cost through Creative Contracting Vehicles
Right now, all of us in the industry are being driven to do more with less because of the sequestration.   We have customers who have proposed non traditional contracts to get their proposal consulting services at a significant savings.   These customers have presented us with a list of proposal consulting labor categories and asked for a significant discount.  And they have said, “If we will use you as a single source for our proposal consulting needs, can you give us your lowest possible prices”?  After negotiations, we have arrived at a win – win position.  The customer gets great prices.  And we make up for the loss in margin with higher volume.  Everyone benefits, including out customer, the consultant, the Government customer, and us.

Three Techniques That Frequently Don’t Work Well in Saving Cost

Serving  as your own Proposal Consulting Agency
Some companies feel that they can save money by serving as their own proposal consulting services agency.   They believe they can collect some proposal consultant resumes; establish relationships with the consultants; and contract directly with them to get a lower price. 

We have seen that this approach rarely works out as desired by the company.  There are several reasons why.  HR almost never has the judgment to balance cost against skills and deliver responsive talent.  The administrative cost of maintaining such an operation is usually higher than expected.   The pool of talent developed is too small to get the job done.  Virtually the only time this approach works out well is when the proposal group manager has a long list of consultant friends he can call on as needed.

Using Boutique Proposal Consulting Shops
A few of the boutique-size companies offer lower prices than the full-service shops.  This may be a single owner operator working out of their home or a small office. 

However, there are risks in working with the boutique shops.  Typically a boutique shop has a limited number of proposal associates – say 75 resumes for example.  The limited number of personnel means that they have difficulties making a close match in consultant skills to customer requirements.  For example, the customer can’t reasonably expect to get a proposal writer with particular knowledge of the agency the proposal is being submitted to.  Further, they rarely have processes to ensure that important factors such as consultant vetting, proposal preparation, and customer invoicing are handled in a standard high quality way.  Additionally, they often don’t have the depth to make an equal quality replacement for a consultant who is forced to withdraw from the assignment due to a problem such as illness.

Holding a Competition to Hire Consultant Agencies
Many companies hire their consultant agencies through a competitive solicitation.  This approach typically does not produce significant discounts.  It is more like a GSA contract where the bidders just submit their normal price list or some-times offer a 2% or 3% discount. 

Conclusion
During my 30 years experience in the industry, I have had the opportunity to see what works and what doesn’t work to lower costs for proposal groups at hundreds of companies ranging from small disadvantaged business (SDB) to Fortune 50.  The percentage of companies that do well in saving money serving as their own in-house proposal consulting agency is small, when hidden administrative costs and lack of efficiency in solutions are considered.   Companies with the discipline to share their proposal consulting needs with the agency far in advance do better in both saving money and getting better consultants.  Companies willing to accept the limitations of a boutique shop can sometimes save money, although many boutique  firms charge just as much as the full-service groups.  Companies  willing to do their proposal business through a single contractor can frequently save big bucks.  This is because the contractor can make up for his losses in discounting through the increased volume in business. .   Surprisingly, companies that compete their proposal consulting service requirements usually don’t get much if any discount.