Learning from Our Losses

By October 2017 Blog Posts

By: Damien Walz, VP of Business Development; Bob Burnett, Director of Oasis PMO, Colleen Young, Proposal Manager; and Tracy Simmons, Sea Account Program Manager

If your company actively bids on Federal contracts, you’ve likely lost more than you’ve won. While losses are painful, after the initial sting they provide excellent lessons to those willing to learn them. At VectorCSP, we put our losses under the microscope to determine how we need to adapt heading into our next B&P effort. This blog sheds light on some crucial lessons we’ve learned from losses over the past year.

Staffing
Our first foray as a prime in a new market on a small, yet important logistics contract led to an overhaul of our staffing process after an unacceptable evaluation. Admittedly, resumes had taken a back seat to other, more technical sections. Typically, they are last to be included and reviewed, thus minimizing the amount of review checkpoints. On this particular deal, we struggled to find the right candidates until a few days prior to submission. In our haste, we failed to note specifics (e.g., surface vs. aircraft systems CM), increasing the risk of unsuccessful contract performance.
Shortly after the debrief regarding our unsuccessful proposal, we implemented a more rigorous screening and selection process. Beginning with the interview phase, we created a script tailored from the LCAT requirements with notes for the interviewer to respond to based on their conversation with candidates. After certifying that the candidate met all the requirements, the script served as a roadmap between the resume template and the original resume. However, with the nature of recruiting still leaving candidates in flux until the later stages of proposal development, we continued to struggle with an inadequate timeline for resume review. On our next bid, we instituted a separate review cycle for resumes; each teammate supplied their top 2-3 candidates for each key LCAT for review. During the review, a panel rated each resume and ranked it within the LCAT group. Following the review, candidates were interviewed further (with script), resumes formatted, and reviewed a second time. While still awaiting award notification from this latter bid, we are confident we learned the lesson and were able to put forth the most compliant and compelling candidates available.

Teaming
In an attempt to enter a new and attractive DoD market, we targeted a piece of program management support work that aligned to some of our areas of expertise. During capture, we determined that the requirement was going to be solicited as a specific set-aside; we were compelled to find a prime with that set-aside if we were to compete. The number of well-established, proven companies with the ability to respond to the requirement as a prime were few, so we chose to back into a teaming agreement based on loose relationships with a particular firm. In the run-up to the RFP, we participated in a handful of capture meetings that left us feeling slightly confused; but our desire to participate on a bid into this new market overrode the uneasiness. Upon RFP release, the proposal process (run by the well-meaning prime) was erratic and again, confusing. It quickly became apparent that our prime had little (or no) experience responding to competitive RFPs, having secured their work primarily through other, non-competitive means. Our team’s proposal was deemed Unsatisfactory from a technical perspective, likely resulting from the haphazard way the proposal was managed and constructed.
This challenging teaming effort made it crystal clear that you are only as strong as your weakest link. In this case, the weak link was our prime. Following this effort, we implemented a more rigorous teaming review, ensuring that all VectorCSP stakeholders (Business Development, Operations, Finance, and HR) were comfortable with the companies we chose to partner with. Further, and in accordance with our ISO certification, we established a Key Supplier List, reviewed quarterly, that charted our relative satisfaction with any given teammate on any particular deal. Finally, this case study confirmed that there is tremendous value in establishing meaningful, working relationships at multiple organizational levels with the companies we choose to work with. When you are lucky enough to discover a great company to partner with, it makes the most sense to nurture that relationship and find additional opportunities to partner on. The energy required to establish the functional working rhythms in these relationships must be capitalized on (over and over again) to derive real value.

Overconfidence
We have all been there before: we have the incumbent staff, the customer loves us, we know what they really want, they cannot do it without us, we cannot be beat… and then, the impossible happens… we got beat. We were overconfident and that was our downfall. The work was in support of a long-term customer and the requirements aligned to our core capabilities; we had been running capture on the opportunity for over 12 months, so we had reason to be confident. However, we allowed our confidence to overshadow potential pitfalls and alternate scenarios that we would have otherwise analyzed and considered during capture and proposal development. We latched onto the idea that our strong incumbent posture would carry the day, and that the customer would not risk switching out the team in the middle of a significant acquisition program. This single-mindedness became the driving force behind our win themes, our staffing solution, and our pricing.
We did consider what our competitors would likely do to win the work, so we were cognizant of the need for a price reduction from current rates, but we did not really dig into this topic to the depth that we should have. We had an idea of what the low price bid would look like, but we never asked ourselves IF we could get to that price, and HOW we could get to that price. We believed that we did not need to get to that price, so we never really explored it. The primary takeaway from this experience is that we needed to explore the low price alternative and consider why we might want to go to that point and HOW we might get there; more importantly, we never really analyzed how our competition might get there. This exercise would likely have also resulted in some creative pricing strategies or uncovered risks and concerns that might not otherwise have been apparent. The other big takeaway is that this analysis should have been done multiple times with different participants, both internal to VectorCSP and external with our teaming partners. We could have used an outside, neutral participant to play devil’s advocate and do nothing but poke holes in our strategy. We learn, we overcome, and we don’t make the same mistakes twice.

Pricing
During the past few months, we teamed with two different primes on opportunities within work streams that we understand well. Opportunity #1 was a re-compete with a prime that was as well versed with the work as we were. As expected, our proposal was deemed superior in all categories except price, where we lost badly. Opportunity #2 was a new requirement and our prime was counting on us to provide nearly all of the expertise for the technical approach. Again, our approach was deemed superior at all levels, but we once again we lost on price; however, this time it was only by about 1%. Both proposal efforts were run sufficiently well and there were no surprises during the process. Notably, both efforts were lost to the same competitor. The challenge came in understanding how we could be so wrong on price on #1 while being very competitive on #2 against the same opponent. One likely factor on the first opportunity was an overconfident prime not putting enough rigor behind their pricing strategy. After all, this was their work, they ran great capture, and they had a great relationship with the customer. A likely factor on the second was that the prime did not have a good relationship with the customer. Lastly, VectorCSP only discussed pricing strategy on both opportunities internally and any pricing conversations with the primes were just general.
While it often seems like most contract wins come down to a technically acceptable solution and a low price, based on these two experiences, the actual answer is slightly more nuanced than that. When we look at the way the two opportunities were lost, we see a stark contrast in pricing gaps and customer relationships with the only equal factors being the competition and the fact that both of our teams’ proposals were rated technically superior. While a good relationship with the customer will not overcome a significantly higher price, it is possible, in some cases, that it can overcome a slightly higher price. The key to pricing is getting to the right price.

Unfortunately, VectorCSP will continue to learn lessons from losses, as we will never win 100% of the work on which we bid. Fortunately, we accept that we will win some and lose some, and that through our losses we have the opportunity to sharpen the saw on the most important elements of pursuing, bidding, and winning new work.