Winning new Government contracts requires that a company pursue them by tracking and chasing more of them if they want to grow the business.  From a sheer numbers standpoint that makes sense.  But from a strategic business development sense, that may mean more opportunities or a better, more focused approach rather than a shotgun method.  From a strategic pricing® viewpoint, it means becoming more creative about what you seek and how you structure the pricing, but it also likely means using more of the tools available to you with what you bid on.

What is here may even be painful, especially for your leadership.  It is no secret that most Government contractors have win rates that range in the 30-40% range, some even higher. Approximately 27% of Government contractors have less than a 30%-win rate. Those that have higher success rates always have their pricing strategy aligned with their capture strategy.  That means that the organization is keeping the strategic pricing® in step with the credible response to the technical solutioning and the theme development – they meet to begin their journey towards attaining a new award and keep that focus throughout.

Most companies (greater than 75%) will aim to submit more bids to attain new Government contracts. The wisest companies will not proceed unless their bona fide probability of winning is greater than 40%. Those who are honest with themselves about the probability of winning. They are interested in developing the business for the long haul, rather than the quick wins that are not sustainable beyond a couple of years.  Why? Because they want the kind of business that develops the core competency of the organization, they prefer contract vehicles that generate task wins or need profitable business that creates a deep solid business base and longevity.

By focusing your approach to pricing, a solid strategic pricing® long game has five factors where conditions are right to increase your Government contracts win rate.  They are:

  1. Financial business strategy for each opportunity. That means, no guessing about the price to win and focusing your pricing using a repeatable process.  This means you will emphasize pre-RFP attention on the things that matter and give you greater odds of achieving more wins.
  2. An annual charted business development plan composing strategic opportunities fitting your overall business plan and a riveted pipeline. This means you pursue your core strengths most of the time.
  3. Strategic pricing® using various pricing tools (see Secrets of Strategic Pricing® for Government Contractors). Give each bid your riveted attention to the details of best pricing rather than working for the sheer number of bids that might win.
  4. Bidding fewer opportunities with only a higher than 40% probability of winning. Honesty in the probability of winning will help you sort out of the pipeline those projects that will draw lower profitability.
  5. Sufficient and qualified staff to price the bids – the talent that stays. By reducing wear and tear on B&P resources, you will attract and keep the talent that more easily bid on your process using your resources.

The value of a long-game approach and goals translate into more maintainable business for the company.  What are the benefits of choosing a long-view approach to strategic pricing® Government contracts?

  1. Generally superior customer experience and internally high satisfaction with the work means that your reputation, ratings, and employee retention show us sustained profitability. Great reviews are great for any business.
  2. Repeat business. What you do well usually translates into more of the same business with either existing customers (think growth), follow-on business, additional work, or new customers who want what you do well.
  3. You drive your overall bid and proposal costs down when you focus on the most important proposals and your core proficiencies. Your business development staff spends time on proposals that matter most to the company rather than those less meaningful and with a low probability of winning pursuits.
  4. Your overall long-term profitability improves. As you maintain relationships with customers who know you well and respect your work, your command of the skills you bring, and the management of those people translate into respectable profits on each project.

The overall goal is to be better each time you bid.  Achieving outstanding ratings is the hallmark of a dynamic and dependable organization.  When you focus on those projects that matter most to your company, you improve your win rate.  It does not always have to be a struggle to price in the basement (and settle for less profitability).  Be dynamic. Be mavericks.  Think strategically about what you pursue and what you do to craft your pricing story.

Also, check out these 5 trends in Government Contracting.

 

 

Marsha Lindquist
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