In almost every contract solicitation, there is a requirement to address risks. But what about your own risks during the recompete process? This is where a recompete risk register becomes crucial. In fact, good program/project management techniques require the establishment of a risk register to ensure the project can be completed on time and on budget. In most cases, successful organizations will have two risk registers, one for impacts to the contract/Governmental client and one that assesses the impacts to the organization of various situations that may arise.

A recompete risk register identifies potential issues that could arise during the negotiation or after signing the contract. Each risk is ranked based on how likely it is to happen and how badly it would affect your business if it did. The register will also outline steps you can take to lessen the impact of each risk, along with who is responsible for overseeing those steps. Finally, the register should be reviewed regularly to ensure the risks and mitigations remain relevant.

Identify Risks in Your Recompete Risk Register

Losing the recompete would be a significant blow. The contract itself would be terminated, meaning that the revenue stream and associated work would be completely lost to your organization.

Consider the following as possible risk factors for your recompete:

  • Financial Loss: You’ll lose the revenue stream and potentially incur exit costs like project management overhead, lease terminations, and building dilapidation fees.
  • Loss of Expertise: Your contract staff may transfer to the competitor (depending on location) or be made redundant, taking valuable experience and client relationships with them.
  • Weakened Customer Ties: The day-to-day relationship with the client is lost, potentially jeopardizing future contract opportunities.
  • Market Impact: Losing a key contract in a specific sector or technology could significantly damage your presence and ability to compete in that area.
  • Reputational Damage: Depending on the visibility of the contract, losing it could negatively impact how potential employees, clients, partners, and suppliers view your organization.
  • Reduced Confidence: Staff morale, particularly those potentially losing their jobs, could suffer during the handover period. The loss could also impact the confidence of other employees, investors, and business associates. Conversely, your competitors will gain confidence if they see a vulnerability in your recompete process.

These risks, along with their severity for your specific contract, should be documented in your recompete risk register. The impact may extend beyond the contract itself, potentially affecting your division or entire organization.

Probability of Occurrence

This area requires particular attention because of the tendency to catch that dreaded disease of every recompete – “incumbentitis” – or the “we can’t lose because we’ve done so well and the client really, really likes us and will pay a premium to keep us on contract” syndrome. To estimate the likelihood of losing the recompete, consider two data points:

  • Industry Retention Rate: Research the typical retention rate for similar contracts in your sector. This provides a baseline probability of keeping the contract.
  • Your Organization’s Retention Rate: Track your own recompete success rate. This personalizes the probability based on your specific performance.

Objectivity is crucial. Don’t adjust these probabilities based on hunches; focus on hard data.

Remember, the recompete itself is certain (100% chance). The only variable is whether you will win it.

Even with a high industry and company retention rate (e.g., 90%), there’s still a 10% chance of losing. Consider this in context of your other risk register entries. Is a 10% chance “low risk” for your organization?

Mitigation: For each entry in your risk register, make sure you identify a mitigation strategy. It’s ok at the onset to not have a mitigation but make sure you develop an action plan for developing a mitigation for each factor.

Using the Risk Approach to Your Advantage

Here are some key points to consider when taking a risk approach to your recompete:

  • Start now: It doesn’t matter if your recompete is three weeks, three months, or even three years away. Taking a risk approach can be started at any point and the earlier the better.
  • Determine who has responsibility for each item in your register: Effective risk registers assign clear ownership for mitigating each risk. Without clear responsibility, actions fall through the cracks. So, who in your organization owns mitigating the risks of losing the recompete?  Is it the Bid Team, Sales, the Account Manager, your manager, or even yourself? If you’re unsure, investigate immediately. Unassigned responsibilities can be a red flag. Important matters typically have clear ownership.
  • Deepen Your Customer Relationships: Go beyond your operational contact and build relationships with those involved in the future recompete process. Understand the customer’s broader needs, challenges, and goals.
  • Demonstrate Continuous Improvement: Don’t settle for just meeting KPIs. Proactively identify ways to improve your service delivery and add value beyond the original contract.  A stagnant approach over a long contract can make you appear outdated. Anticipate the customer’s future needs and demonstrate your ability to adapt.
  • Enhance Communication: Go beyond basic reporting.  Provide valuable insights and analysis, including trends and user feedback. Share knowledge that benefits other parts of the customer organization.  The more value you add through communication, the stronger your overall relationship will be.
  • Document Your Successes: Meticulously document your achievements and positive impacts throughout the contract. This evidence becomes invaluable for your future bid team, allowing them to craft a compelling proposal that highlights your proven track record.

Following the above steps won’t guarantee you win but will most assuredly increase your chances of doing so.

Note:  The author is an OCI business partner in the U.K. and probably the leading authority on recompetes.