A key aspect of writing a RFP with a winning strategy is to clarify uniqueness amongst competitors. A critical skill in success is being able to implement insights gained from data. Further, it is important to convey the strong health of my company, my products and myself. Low cost is not the best strategy because it is important to focus on the value I am bringing to the table. It is also important to remind the offerer the cost of not choosing to work with me. Showing the offerer ways I am going to excel above and beyond expectations does not coincide with a low cost. The offerer needs to feel completely taken care of and approaching the discussion with a low cost drives them to wonder whether I am exceeding at fulfilling the project’s requirements. The best way to understand the offerer’s wants and needs is to ask them questions before crafting the proposal. A bidder implements specific strategy based on whether the it makes sense to use a numerical or non-numerical project selection model. The tendency of organizations to depend on profitability models, while excluding non-financial costs and benefits, is a major mistake. A weighted scoring model is useful because it allows multiple objectives of all organizations to be reflected in the decision to support or reject projects, can be easily adapted to changes in philosophy or environment, and it does not suffer from the bias toward the short run. Additionally, I can conduct my own research about the project site’s characteristics and offerer’s background. That way, I am on the same page with the offerer by the time we sit down and review the proposal materials together. Then, I can communicate ways I am knowledgable in the context of the offerer’s concerns and also show I am capable of achieving the results the offerer is looking for. Involving top-level management in the proposal stage of the process increases the chance of achieving success. Collaborating with specialized professionals from other organizations is also a way to bring together strengths is a phenomenal way I can communicate to the customer they are getting the best deal. Considering offerers craft the idea for projects with long-term results in mind, they are concerned about the work’s quality and are willing to pay for a valuable experience and outcome.
It is logical for me to take time preparing a proposal because the projects are massive endeavors worth a lot of money. Considering it takes time and resources to prepare a thorough and persuasive proposal, it is important to originally do it well. The process of gaining the offerer’s trust is tender and can be shattered with mistakes made early in the cycle. As a bidder, I need to do everything ethically because it will help me not be distracted and also set me apart from competition who may lose the offerer’s trust after being unethical. It is crucial to present the proposal with a clear understanding of the purpose and a completely organized style so the offerer respects me and can foresee similar behavior from me as the project continues. It is important to be attentive to every aspect of the proposal. It is worth it to spend money in the initial proposal drafting and contract formulation stages to guarantee I can advance to the proximal phases of the process. At the same time, setting realistic expectations in the contract is crucial to ensure the offerer is not surprised later on. Also, requesting feedback at multiple moments leading up to the proposal makes the offerer feel listened to and improves processes with future clients.
Response by Professor Pasquini:
“clarify uniqueness among competitors.”– This is called “Ghosting” the competitor.This done after your company would complete a “SWOT” analysis which indicates for your company your Strengths, Weaknesses, Opportunities, and Threats. This is a techniques that can help your company decide to bid or not and if so how to Ghost the other company with your strengths compared to the competition.
Not using the final cost as a differentiator is good as you want to provide the “Best Value” to the customer for you work compare to the competitors. The customer is not looking for the lowest price, this would be a Request for Quote. Even if you bid is more expensive then the competition, the Best Value could be a winning bid if further explained.
My Response:
Hi Professor Pasquini,
I am interested in the SWOT analysis framework considering it has the power to help the project manager’s company decide whether to bid or not. To gain understanding of the general framework, I took a look at an article from the Renewable Energy Law and Policy Review to understand the framework’s components. In the article’s context, the strengths sector is characterized by the continent’s abundance in resource reserves which are evenly distributed across the continent (Niyibizi 2015). However, a key weakness is, despite almost unlimited renewable energy resources, not more than 20%, and in some countries as little as 5% of the population has direct access to electricity (Niyibizi 2015). The opportunity directly addresses the weakness as mini-grids (localized generation, transmission, and distribution of power) can support rural Africa as the cost of solar energy has fallen in recent years (Niyibizi 2015). Still, the risk and uncertainty embedded in it being new technology is a threat considering development of skills at engineering, technical and managerial levels are lacking in the area (Niyibizi 2015). The example I provided is more so a SWOT analysis of a general concept, implementing renewable energy in Africa. I also see how it would be useful in terms of incorporating a winning strategy amongst other bidders.
Source:
Niyibizi, Alphonse. 2015. “SWOT Analysis for Renewable Energy in Africa: Challenges and Prospects”. Renewable Energy Law and Policy Review. 6 (4): 276-293.
Response by Professor Pasquini:
You’re describing a much different SWOT. The bidding company always should do an evaluation as to their competitiveness for winning the contract. You’re describing a much different type of SWOT by the ” Renewable Energy Law and Policy Review.” While it’s good to understand the differences in the two approaches, the company considering to bid may decide not to bid for many reasons, such as not competitive with cost or technical knowledge, not known by the customer, doesn’t have the correct personnel for the job.
My Response:
Hi Professor Pasquini,
Your feedback makes sense.
The type of SWOT analysis you referred to should only be used to analyze the competitors prior to a team drafting its own proposal. After then analyzing one’s own strengths, the team can realize which of its strengths the competition is lacking and accordingly emphasize those strengths in its own proposal. From there, the team can work on framing the proposal in a certain way to bring attention to those strengths. Complexity arises when a company must choose whether or not to withdraw a bid when it has both advantages and disadvantages compared to the competition. I imagine there would be some sort of analysis measuring factor significance to determine which needs are most pressing to the customer and inquire whether there are any “deal breakers”. For this reason, inquiring as much as possible early on is a smart way to go about it. Perhaps, secondarily, after analyzing its own well-rounded standing against the competition and continuing to pursue with drafting, a team may apply a SWOT analysis of its own proposal at the final stage of proposal revision before submitting it to the offerer. However, as you mentioned, it is a much different type of SWOT analysis.
Comment by Janice Lauria:
Mary,
Great discussion post. Very detailed and well-written. I like the position you took of involving top-level management from the beginning of the proposal all the way to the end. I feel like this is a great way to increase your chance of success as well and also shows that not just a small group of people are working on bringing in projects to the company. I also like that you included time, effort and trust in your proposal strategy. Though those are normally things people do not think about, they should be enforced. If proposals are rushed, though most are time-sensitive, it is still important to enforce the idea that the right resources and preparedness went into it. On top of that, the effort went into the proposal to ensure the goals of the client and company want it to look like. Lastly, as you stated, no proposal will be completely organized or complete without the trust from the client. If the bid gets off to a rocky start, it will be a disaster (Meredith et al. 2018, 34-47). These are great points you brought up that should be in all proposals. Nice discussion.
References
Meredith, Jack R., Scott M. Shafer, and Samuel J. Mantel. Project Management: A Strategic Managerial Approach. 10th ed. Hoboken, NJ: Wiley, 2018.
Response by Professor Pasquini:
the company considering to bid may decide not to bid for many reasons, such as not competitive with cost or technical knowledge, not known by the customer, doesn’t have the correct personnel for the job. Upper management at the top level has minimum involvement and only gives the OK for the proposal to be created since this could be a costly and lengthy process that takes away billable work from employees on the proposal. That’s why a SWOT is and should be done.
From my last bid we spent 2 years and 8M dollars in creating our proposal. We did win a 10B contract. Time and energy and cost were extensive for 2 years. But, it all payed off. The losing company spent 12 M and no return on their investment.
Response by Alexis McClintock:
I had not heard of the SWOT method until this class, and then was doing reading for my leadership class and the method was discussed in that text. A lot of overlap here.
In my other class the SWOT assessment in discussed in terms of creating a vision for leadership and the company to follow. This method must be used in a thorough and objective manner. If when conducted there is denial of resources possessed or important information is left out it will not work. Identifying and properly highlighting the strengths creates a competitive advantage. These advantages can be in the form of technology, product knowledge and expertise, experienced workforce (Manning and George 2014). Knowing this I can see how it is a great nonnumeric model to consider when determining if it is practical to bid on a project. You either have a competitive advantage that makes it worth your time to write a proposal or you don’t and you have at least helped identify areas where management can improve internally.
Manning, George. 2014. The Art of Leadership. New York: McGraw-Hill
Response by Professor Pasquini:
Yes, very well stated. But, “The best way to understand the offerer’s wants and needs is to ask them questions before crafting the proposal.”—-needs to be done before the RFP is out. If not then all bidders get the answers to the bidder’s questions to be fair to all bidders. So meeting early and often with the customer is important. This is generally the job of the Business Development group of the bidder’s company.
Response by Jennie Horton:
Mary,
I agree that prioritizing low cost is not a winning strategy for all RFPs, although the cost does usually still have to be competitive to be considered. Depending on the offeror and type of project being bid, there is still a budget that must be met. Another consideration is the fact that many times, you won’t have an opportunity to have lengthy discussions with the offeror. There are pre-bid meetings held, but those may include a dozen companies all getting the same information on what assumptions should be made when crafting their RFP and items that have raised common questions. The organization must read the RFP and all associated documents very carefully to ensure they address all parts of the project in their proposal.
Your discussion on the necessity for top-level management to be included in the RFP process and the importance of conducting the appropriate project selection model is spot on. Companies can spend a lot of money putting together a proposal, only to realize it doesn’t fit their portfolio well or management isn’t as excited about the project as staff.
Response by Professor Pasquini:
Yes, too high or too low of a cost may exclude your proposal from further consideration. There could be hundreds of proposal to evaluate and the a short list of potential winner are defined. The short list is developed by a scoring system by the proposal evaluators, a small group of say 5 people that will be involved with the project that is bid on or by Subject Matter experts. After the short list in determined, the prospective winner are called in for oral presentations to explain and outstanding question in their proposal or to present the key personnel that were identified to run the project and for them to explain their background and experience with similar projects or answer any question by the evaluation team. The a winner is announced.
This is how the fed government contracts are awarded. Out of house contracts by another organization to prospective bidders is don’t usually the same way.
Comment #2:
Original Post by Ariana Guilak:
In order for an offerer to set themselves apart from others in the fierce competition to respond to an RFP, they must not only show beyond a doubt that they have the knowledge and ability to complete the project correctly and on time, but demonstrate a unique and innovative approach which will benefit the client for many years.
It is a given that the proposal must be within a budget range, but effort and innovation within this range can make the difference between proposals with similar costs. One important criteria of a great project, highlighted by Dvir et al. (2011), is that it is “highly innovative from a scientific, technological, design, or operational perspective”. For many offerers, it may be beneficial to spend some extra money in writing the proposal to ensure that their approach is at the forefront of the industry, utilizing the most advanced and relevant technology and design possible for the project.
Another important differentiator is the long-term benefit of the project. Arguably more important than the payback period of a project is the more long-term ability of the organization to “capitalize on future opportunities” (Meredith et al. 2018, 38). If two proposals have the same initial cost, but one proposal will result in more long-term profitable results past the payback period, that proposal is likely to win. Especially if the proposal can introduce ideas the organization may not have anticipated, but will result in increased long-term benefits, that level of innovation would be well worth the potential extra cost.
Another way an offerer could set themselves apart is in the sustainability of its proposal. As sustainability focuses on “long-run profitability rather than short-run payoff” (Meredith et al. 2018, 36), the offerer would need to emphasize the long-term profitability that sustainable initiatives provide in their proposal, especially to justify potentially higher short-term costs. However, the added marketability of a sustainable project would have positive impacts both during the project as well as long after its conclusion.
While there are many ways offerers can create exemplary proposals, by setting themselves apart and providing unique, technologically innovative and sustainable solutions that will provide long-term benefits to an organization, they can craft a ‘winning strategy’ and be competitive in submitting their RFP response.
References
Dvir, D., and A. J. Shenhar. “What Great Projects Have in Common.” MIT Sloan Management
Review, Spring 2011.
Meredith, Jack R., Scott M. Shafer, and Samuel J. Mantel. Project Management: A Strategic
Managerial Approach. 10th ed. Hoboken, NJ: Wiley, 2018.
My Comment:
Hi Arianna and Professor Pasquini,
Yes, one example of presenting rare propreity technology is a company having a certain type of solar panel with superior aesthetics, high wattage and superior durability. When I was in the residential solar panel system industry, this type of panel was the LG Panasonic. There were certain customers who only wanted a proposal with this panel. Since many of the smaller, start-up companies typically chose to carry one type of panel, usually not the LG Panasonic, so the company could buy it in bulk, it lost deals involving prospects who clearly identified the LG Panasonic as a need. While it cost the customer more money to get the LG Panasonic panel relative to the alternative, many customers were still willing to do so because they did not want their panels to malfunction and were concerned about them being long-lasting. Now, only two years later after immense industry technology development, the LG Panasonic panel is not superior in the categories it once was. A company would need to constantly be changing its outsourced panel partnerships to consistently offer the unique, innovative approach that would benefit the client for many years.
Comment #3:
Original Post by Jennie Horton:
The drafting of an RFP can be a costly endeavor for companies to undertake, mostly in the form of staff time. However, there is also the potential to incur travel expenses for pre-bid meetings and of course the cost of collecting research and creating the final deliverables. For this reason, companies need to be careful when selecting which projects to pursue and how to best address the requirements of the RFP.
A thorough review of the RFP is critical at the beginning of the process. This will help the company in their analysis of whether they will submit a proposal. The company must understand all aspects of the project being proposed, how they can benefit the offeror, and if they are able to submit a proposal on their own or need to assemble a team. Additionally, many RFPs will have limits on the number of pages for each section, limits on the number of pages overall, specific submission requirements (2 copies mailed, emailed to a specific address, etc.). Imagine the feeling of putting in countless hours of staff time on what you think is the perfect proposal, only to find later you missed a signature line or went over a page count?
When drafting the proposal, a company must be clear in how their past experience and project team will benefit the offeror. What specialized skills or technology does your company possess that addresses the problem the offeror is trying to solve with the project? If there are obvious gaps in your company’s experience, how are you going to fill them? This is often addressed through teaming with other companies or through the use of skilled subcontractors. Highlighting key personnel and what they bring to the project is not only necessary, but often required. While it’s best to avoid speaking poorly of competitors, the proposal can include a discussion of what your company offers that is not typically found in your field. Knowing the offeror is important as well. This doesn’t mean you need to have worked with them before, but if you know they are more conservative and less inclined to use new ‘untested’ technology or vice versa, you would want to craft your proposal to match.
In short, companies need to be thorough in their review, both of the RFP and final proposal. They must highlight what they bring to the table, address shortcomings, and show they have the expertise to deliver the project in the timeframe and budget necessary.
My Comment:
Hi Jennie,
I agree the drafting of an RFP can be a costly, lengthy endeavor for companies to undertake. Although I understand staff time would be a costly resource in the process, I wonder, what percentage of the total cost of RFP drafting and revision would be contributed to paying for staff time? I imagine the cost of collecting research would be a significant cost because it may involve paying consultants outside the project management team. It will be interesting to see other costly components involved before being able to present a quality RFP.
Great point in saying RFPs may have length limits. Particularly for small-scale projects, I can see clients saying they have limited time to devote to reviewing the RFP.
Great point in saying a company can use past experience to prove how it will benefit the offeror. Past experience is a great way to increase reputability. Incorporating a list of client references from past projects is a way to assure the customer it is going to have quality customer service throughout the experience. Also, showing the customer that one’s company successfully completed a project similar to the scope for the given RFP would be useful. Considering our textbook talked about the inevitability of a project manager dealing with conflict and other problems along the way, perhaps a bidder can talk about how its company adapted to challenges in the past. That way, the offerer can understand that this project manager is equipped to deal with issues that may go wrong, particularly in context of a RFP with a lot of risk.
Comment #4:
Original Post by Erik Anderson:
A winning strategy can be described as an attribute to a proposal, made by the bidding company, that makes their response to an RFP both competitive and inclusive of the services they can provide for a project.
First, it is highly suggested that the bidder research and actively communicate with the outsourcing company (offerer) so that the bidder has knowledge on the parameters of the request. By gaining key knowledge about the outsourcing company as a whole (strategic objectives), as well as specifics to the outsourced project (business objectives), the bidder can position themselves in their proposal to be an ideal choice for the outsourcing company. If possible, it is ideal to investigate how the outsourcing company will judge and select proposals. A bid should likely be focused on prioritizing aspects related to selecting a numeric model of profit/profitability (so the proposal should focus on cost and resource management above all else) whereas a proposal may require an investigation of several nonnumeric models, or a mixture of both. The most important winning strategy is to clearly define the goal and direction for the project (Meredith et al. 2018, 30-31). In sum, this winning strategy is to align the context of the proposal in parallel with the requirements the project and the organizational objectives of the outsourcing company.
Following this, a second winning strategy is to guarantee the ability of the bidder to complete and prioritize the outsourced project. This winning strategy focuses on the leadership and strategic management abilities of the offering company (Meredith et al. 2018, 29). In the proposal, the bidder should highlight how the bidding company will complete the project; providing descriptions of phases and specific processes that will be undertaken. Required resources should be identified, both physical and personnel. In reference to personnel, the proposal should outline the appointment of a representative to guide the execution of the outsourced project to guarantee attainment of benefits (taking into consideration principle-agent theory). The bidder should identify top performers, such as a potential project owner, sponsor, and manager, and ensure their qualifications and commitment to the outsourced project. This may warrant a SWOT analysis (strengths, weaknesses, opportunities, threats). Engagement and support for the project from top management is necessary for providing resources and authority to any project, and their involvement in the proposal is ideal when considering the project’s implementation.
Finally, a major winning strategy when responding to an RFP is the identification of risks. This is important from a business and ethical standpoint, as it informs the offerer of risks particular to the undertaking of the outsourced project by the bidder. Included with the identified risks should be preliminary risk responses, with rough interpretations of how realized risks will affect cost, time, and scope. Risk management is used significantly more in high performing organizations than in low performing organizations, and in the event of a highly competitive proposal process, the offerer will appreciate transparency and/or expect a risk analysis within the proposal (PMI 2017).
References:
Meredith, Jack R., Scott M. Shafer, and Samuel J. Mantel. 2018. Project Management: A Strategic Managerial Approach. 10th ed. Hoboken, NJ: Wiley.
2017. A Guide to the Project Management Body of Knowledge (PMBOK® Guide). 6th ed. Newtown Square, Pa.: Project Management Institute, Inc.
My Comment:
Hi Erik,
Great post!
To clarify- the offerer is the potential client and the bidders are the varying project management companies. The bidders create the RFPs to present to offerers.
Many posts have correctly talked about the need for bidders to not only actively communicate with the offerer early on in the process, but also do outside research. What are examples of outside research a bidding company may need to do prior to or as it creates the RFP? I imagine one type of research would be investigating the background of the offerer company so the bidder can understand wants and needs that the offerer did not directly communicate. Knowing additional wants and needs can help separate a bidder from its competition. Also, if the scope of the project is different from that which a bidder has previously done, it may need to research other similar projects managed by other companies. For my nominated project, I am going to have to thoroughly research the location the offerer is looking to restore for a trail system because there is an ecological understanding required to satisfy the offerer’s demands. I figure other projects may entail a similar sort of preparation even when its scope is merely construction. Just as knowing the lay of the land is useful in war, if a project manager can show the offerer it has its bearings during the meeting discussing the RFP, it shows competence.
Great point in saying it is useful for the bidder to understand how the offerer is going to judge and select a proposal. One way of doing so is preparing key questions before preliminary meetings with the offerer. As mentioned, these questions need to focus on evoking both numerical and non-numerical offerer preferences. They also need to be specific. The more specific they are, the greater likelihood the competition is not inquiring about the same issues. Further, being able to communicate clearly early on in the process shows the offerer that the project management team is likely to continue that professionalism as the project proceeds.
Response by Erik Anderson:
Hi Mary,
Thank you for replying to my post! I see how I confused the titles of the offerer and bidder when explaining my winning strategies, and I’ve made the appropriate changes to eliminate any confusion.
Your explanation helped me better understand how the winning strategies I mentioned play into offerer-bidder relations in the RFP process. I like how you honed in on what I described as theoretical winning strategies and explained how they would play out in a real-world situation. Also, your elaboration on key communication-based winning strategies like asking specific, thought-provoking questions during meetings with the client is something that I have taken note of and will be sure to consider while developing my deliverables.