Working with project managers on recompetes: Risk aversion versus price (Part 1)
Incumbents often proceed with the re-compete capture and proposal process with only peripheral involvement from the project manager. I believe that this attitude is part of the general problem of incumbentitis – the false sense of security, complacency, and over-confidence that results in failing to take the capture/proposal process seriously and thus losing the recompete bid. In fact, recent industry statistics indicate that incumbents do lose approximately 50% their recompetes.
In the current climate of budget constraints, the customer experiences even greater tension between their natural risk aversion and the real or perceived need for fresh perspectives. They must balance low risk versus low price. Only by working closely with the project manager in the capture stage can the capture manager gain an honest assessment of the customer relationship in order to reinforce the customer’s risk aversion. Working with the project manager, the capture manager and executive leadership should focus on the following questions:
- Are there any problems or performance issues that have arisen?
- Have you addressed these issues successfully?
- Have you taken proactive, preventive measures to prevent recurrence of any problems or to introduce cost savings, innovation, and/or best practices?
Any performance issues will reduce the advantage the incumbent has of being low risk. Capture and project management must work hand-in-hand during project execution to build the customer relationship and ensure the past performance ((Past Performance Information Retrieval System (PPIRS), Contractor Performance Assessment Reporting System (CPARS)) reflects high-quality work and customer satisfaction.
Price is another potential issue for incumbents. The current environment favors low price/technically acceptable (LPTA). In a re-compete, it is difficult for the incumbent to come in as lowest bidder due to more senior labor categories. Therefore, start early to transition more junior staff onto the project (staff remaining from contract start may be overqualified and command a higher salary than more entry-level – yet qualified – replacements). Additionally, work with the project manager to look for areas where technology and process improvement can increase cost competitiveness.
Price and risk are a balancing act for the incumbent. Only by partnering with the project manager can capture managers and executive leadership find the right mix that speaks to the customer’s needs.
As an incumbent, how do you prepare your company for recompetes well before RFP release? Send an email to me at BWingate@LohfeldConsulting.com with your suggestions, and I’ll share your advice in upcoming posts!
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by Bob Lohfeld
contributors Edited by Beth Wingate
Did you know that contracting officers spend up to 20% of their time mitigating disputes between teaming partners? In an informal poll we conducted on LinkedIn last month, 40% of respondents classified their teaming partners as “frenemies” on their last bid.
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