In the past several years, incumbents have lost their advantage in the Federal Government market. Industry studies show that incumbent contractors now have approximately the same win rate on rebids as non-incumbents. Rapid technological change, as well as fiscal constraints, mean that customers are more willing to consider alternatives. Still, winning a bid against an incumbent contractor is a challenge because best informed wins, and the incumbent is still the best informed.
In this webinar, Lisa Pafe, CPP APMP and Lohfeld Consulting Group Principal Consultant, provides 10 proven best practices to create a competitive edge over the incumbent in today’s changing environment.
(Look for Part 2 of The End of the Incumbent Empire: Remaining as Incumbent in the next couple of months.)
Here is Part 1 of the questions we received during the webinar with answers from Lisa Pafe.
Q: How do you approach clients that are not accessible and you are directed to only talk to the Small Business Liaison?
A: Ask the Small Business Liaison to help set up meetings for you. Remember, each “customer” is comprised of business, contracts, technical, and budget stakeholders. Get your foot in the door with at least one of these, and always have a follow up action—such as a white paper.
Q: Many contracts are simply getting extended by contracting officers. How do you prevent the extension to the incumbent?
A: You cannot prevent an extension to the incumbent; however, an extension gives you more time to work on your capture.
Q: Which of the 10 approaches are best for professional services in government contracting? Which of the 10 approaches are best under Lowest Price/Technically Acceptable (LPTA)? Which of the 10 approaches are best under Best Value (BV)?
A: All of the 10 approaches work for professional services and for both LPTA and BV. The main difference in LPTA is that you must focus more attention on having the absolutely lowest price, thus requiring much more competitive analysis.
Q: What is the current win rate for incumbents providing professional services?
A: The research on current win rates does not break the data down by type of services. Assume incumbents win 30–50% of the time.
Q: Are contracting officials required to disclose incumbent/follow-on order information such as Award IDs upon request? If so, is there a best practice on how to go about requesting this information?
A: If the procurement is not classified, then award information is considered public. If the contracting official will not answer your questions, you can typically research incumbents using subscription services such as GovWin or Bloomberg. You can also try publically available tools such as FedSpending.org or USAspending.gov.
Q: Are there unique strategies that may apply when a small business competes against a large business incumbent on an unrestricted procurement?
A: It is very difficult for a small business to compete with large business incumbents on an unrestricted procurement. As a small business, you would need to have a truly unique value proposition that provides more strengths than the incumbent and no weaknesses. You could try teaming with partners that fill in gaps and/or providing lowest price, but unless you have pre-positioned yourself very well with the customer, in most cases it will be an uphill battle in overcoming perception of performance risk.
Q: Discuss typical information sources to obtain intelligence on incumbent performance and customer requirements. Do you have a list of recommended open sources for competitive intelligence information? What alternative intelligent gathering methods might you recommend when you are not able to get an audience with the programs people or CO? For example, how can you find out about how the incumbent’s current performance is perceived, business problems that are still not resolved by the current contractor, pricing information, etc.?
A: You can typically research basic information on incumbents and customers using subscription services such as GovWin or Bloomberg. You can also try publically available tools such as FedSpending.org or USAspending.gov. Other sources include:
- Incumbent web site
- Customer web site
- Job posting sites
- Press releases
- Annual reports/financial reports/investor information
- Conference publications
- White papers
- Industry news magazines
- Talking to current and former employees and contractors.
Q: In a procurement for services, other than price, what differentiators can set you apart from the competition? In today’s environment, what is the best way to make an impression on a government decision-maker prior to the release of a procurement? What is the number one capture “must do” to put yourself in position to be successful on a bid?
A: You can differentiate yourself by proposing better and/or more strengths that benefit the customer by exceeding requirements, helping meet contract or mission requirements, and/or offering value-add. You make an impression by positioning your strengths with the customer during the capture phase. The best method to use in crafting your solution is focusing on building the greatest number of strengths and mitigating all weaknesses prior to RFP release. The number one “must do” is to position and shape your value proposition by listening to the customer.
Q: Do you have a particular location in proposals that you recommend inserting a differentiation from the incumbent?
A: Differentiation should be evident throughout the proposal. Every section should have win themes that include your differentiators with substantiation.
Q: Is it best to always propose some percent of incumbent capture if it’s optional (I know sometimes you HAVE to offer incumbents a position).
A: I recommend stating that you will work with the customer to understand incumbent employee skillsets versus those needed for the new procurement. You should propose to capture at least 90% of qualified incumbents. Back this up with evidence and examples of where you have achieved similar incumbent capture rates.