“Price-to-Win” – The Logical Next Step for Growing Your Business
R Admin | July 15, 2013
The Key Role of PTW in the LPTA Environment
We all know that competition for contracts is increasing in an environment of shrinking Government dollars. Having meaningful and accurate intelligence about your customer and your competition is now more critical than ever before. Especially in this LPTA environment, companies that want to win have to routinely use PTW. This involves making a strategic analysis of your company against both the customer and your competition. A good PTW analysis influences your entire proposal strategy by providing detailed information of the lay of the land. This allows you to make more informed decisions about your technical approach, staffing plan, management plan, and pricing to produce a proposal that is more attractive than those from the competitors.
Two Perspectives – Customer and Competitor
From a customer perspective, a good PTW analysis will take into account things such as your potential customer’s buying history, funding levels, their “should-cost” estimates or ROMs, and what they are saying they really want for your specific opportunity. From a competitor perspective, a good PTW analysis will review areas such as your competitor’s most likely win strategy, labor mix, teaming partners, their historical pricing, and where they are likely to price the specific opportunity.
Two Common Mistakes
Sounds easy, right? In reality, bidders often make two critical mistakes when performing PTW reviews:
- They wait until it’s too late to start the analysis. Intelligence gathering takes time. The most effective PTW efforts are part of the overall business development process and begin with the pipeline – the assessment of upcoming opportunities and whether you want to bid them. If you wait until the RFP is on the street, you will only have enough time to determine your own pricing and possibly gain a limited understanding of what your competition is doing. Potential teaming partners will have been picked over, and the number of winning options becomes limited.
- They do not have the analysis performed by an independent third party. Why is this important? When assessing the competition and potential clients, judgment calls are often necessary. The analysis can be as subjective as it is objective in nature. When evaluating the data, internal staff can be conflicted by internal corporate pressures or be so excited about an opportunity that key issues are missed. They also may not have the depth of knowledge to adequately interpret the information they are seeing. This frequently leads to decisions being made on bad or partial information and a loss of the opportunity. Independent specialists are able to make dispassionate evaluations of the intelligence and arrive at unbiased recommendations. They also have broad backgrounds across all aspects of business including how to interpret an RFP and its associated documents; teaming or subcontracting arrangements; Government Cost Accounting and indirect rate development; disclosure statements; the development of bills of material or bases of estimate; knowledge of program implementation; and cost modeling.
A Path to Implement / Improve Your PTW Program
Fortunately, instituting or improving a PTW program is not difficult. Carefully selecting the right PTW consultant who understands your business, suits your corporate personality, and is experienced in helping companies implement internal programs is the key. Someone you feel you can trust and respect. Beginning to incorporate a PTW process into your overall operations or improve the process you have will be critical to your continued bidding success over the next few years. Anyone wanting to discuss this further is invited to contact us at 703-689-9600.