I will be continuing to write a series of blogs on competitive bidding and proposal writing in the public sector but decided I should pause and have a general discussion on proposal writing. “Why am I writing on this subject?” you may ask. The answer is straightforward. I am a procurement expert with over 35 years who specializes in the public sector. I assist firms who need to understand government bids in order to write successful proposals.
If you are working for a firm that wishes to grow and expand, you need to accept the fact that proposal writing is essential. Competitive bidding and the Request for Proposal process are becoming more and more complex. With approximately 60% of major spending being done by the public sector, you cannot afford to ignore the opportunities.
Although service (such as delivery requirements) enters into it, companies that primarily offer off-the-shelf goods are mainly evaluated by price. If this is your situation, the blogs will not be of major interest for you. They are mainly designed to assist people or companies that bid on services, or goods with a large service component.
For over the thirty-five years, I have been involved in reviewing many proposals. They ranged from simple written proposals of only a few thousand dollars to large, complex proposals that totalled multi-million dollars. The evaluation criteria applied to these written proposals have ranged from simple easy-to-understand criteria which were evaluated in one day, to extremely complex criteria which took weeks to evaluate and to complete.
Over and over again I have seen firms make mistakes that should and could have been avoided. Sometimes these were omissions due to oversights; sometimes factual errors; sometimes instructions were ignored and sometimes it was apparent that the firms simply could not or did not understand the instructions.
More than once, I witnessed bids received as the result of a Request for Proposal where the total cost of preparing the proposal for each of the firms who bid was greater than the value of the final contract.
As an example, let’s assume that you are going to bid on a requirement worth $60,000 and it will cost you $5,000 to produce your proposal. Later, you find out that there were 14 other bidders. This seriously reduced the chances of your winning the bid.
Assuming the other 14 bidders have spent the same amount of money ($5,000) to prepare their bid, then the cost of preparing all the proposals can be determined. Total contract: $60,000. Total proposal cost: 15 firms x $5,000 each = $75,000.
Spending more money in preparing bids than the value of the final contract makes no financial sense from any viewpoint – yours or the buyers. With so many bids, it is obviously none of the firms had evaluated their odds of success. In other words they had not done a Bid/No Bid analysis. In my opinion, you normally should not bid unless you assess your odds as at least 1 in 4.
I have also observed a multi-million dollar bid where the firm forgot to enclose one critical document. There was another bid that had critical pages omitted due to poor or careless assembly of the proposal. There was still another bid where information was duplicated and placed in two sections – once in the correct spot and once replacing information that should have appeared. In the latter case, the information that should have been there was critical to the evaluation.
It became apparent to me that there is a need to help bidders improve their practices and procedures with regard to Request for Proposals. They need to understand the procurement process, the different documents and the different approaches to evaluation in order to increase their odds of success.
Care needs to be taken in writing a proposal. Successful proposals will be used as a benchmark in any subsequent negotiations. Any and all commitments made in your proposals are legally binding and you will be expected to honour and fulfill them should you be awarded the contract.
Every customer is different. Although they try to define their specific requirements, many are not able to write a clear definition of what is required. This makes every bid document unique and requires each one to be read carefully. Often, if they are not written well, you, as a bidder, are left trying to interpret the bid yourself.
Proposal preparation includes a large component of risk management. Carefully undertaking the preparation will reduce the risk of failure and increase the probability of winning a bid. Even with this risk, proposal preparation should be regarded as an investment in the firm, not a cost of doing business.
If you are like most companies, proposal preparation and writing are not the skills or specialties that you offer to your customers. Just as you expect customers to contract with you for your specialized skills, you should consider hiring firms or individuals such as me who are subject matter experts. We can, not only improve the quality of your proposals, but also improve the odds of winning the bid. If you wish to discuss this further or want more information, check you my website, www.allancutlerconsulting.com.