Do you approach a request for proposals (RFP) as you would any other business opportunity? Do you carefully evaluate it to determine fit with your company’s expertise and core business?
Many firms find that having a go/no go system for evaluating RFPs, Request for Qualifications (RFQs) and tenders reduces the chances of making a poor business decision. It forces a discipline on what can sometimes be an emotional process.
A go/no go system can be a simple checklist or a more complex matrix, depending on the size of the project and the culture of your firm. Whatever system you use, a format that you can repeat and modify as market conditions and your firm’s resources change will yield the best results.
I spoke with Frank Gibbins, Business Development Manager for Pangaea Systems Inc. about his firm’s approach to evaluating opportunities. He says the most important question he asks is “Were we born to do this?” In other words, does it fit with Pangaea’s strategic plan and vision?
Gibbins shared some of the other criteria they use in making a go/no go decision:
1. Is it strategically critical? For example, is it a new account? Will the outcome be of strategic importance? Will other ministries be looking for the same type of product or service?
2. Is the opportunity type and magnitude appropriate? For example, is it project work requiring discrete teams (our preferred type)? Is it the right size for our office of fifty people? Does the projected profit justify the opportunity cost?
3. Can we support it? Do we have resources for the project’s timeline?
I asked Gibbins to describe the process they would typically go through when evaluating an RFP or RFQ.
Their first task is to conduct bid research to find out about opportunities, ideally before they hit the street. The business development team writes one-page summaries of each opportunity, including the contact name, a brief description of the project, its scope, and the kind of skills that are required. They prepare them for further analysis by the Development Directors.
These senior managers have technical expertise and responsibility for specific ministries. The directors meet once a week as a committee to make the go/no go decisions. Gibbins reports that these sessions can be lively – like a team of intellectual piranha tearing ideas apart.
Gibbins emphasizes their ability to remain flexible throughout the proposal process. They are willing to abandon a proposal, no matter how far they have gone, should a better opportunity come along. He advises other vendors not to be afraid to make difficult decisions.
He also points out the importance of tracking your results. How is your win/loss record? What dollar size of projects are you winning? Are other patterns emerging? All of this information can be fed back into your go/no go checklist, helping you further refine your decision making process.
If you do not have a formal go/no go checklist, take a look at the accompanying table for some ideas. If you do have a checklist, is it time to revise it?
Typical Go/No Go Questions
- Does the requirement fit with our company’s capabilities?
- Does the project mirror our firm’s market-niche expertise?
- Do we have an understanding of the client’s business and their mission?
- Does the client expect us to respond?
- Is the client known to favour a particular approach? If yes, can we provide it?
- Are they likely to pay a premium for value-added services?
- Do they offer potential for repeat business?
- Has the client provided a budget for the project?
- Does the budget provide for a level of profitability that is acceptable to our firm?
- Will “low-ball” competitors be submitting bids?
- Can we differentiate ourselves on a non-price advantage?
- Is the cost and effort of preparing a bid affordable in view of the potential profit?
- Do we know what risk we will bear if we win the project?
- Are there schedule risks and uncertainties?
- Can we meet the terms and conditions?
Firm readiness issues
- Are there opportunities where we are better positioned than this one?
- Can we meet all the mandatory requirements of the RFP?
What about the desirables?
- Does the location affect our ability to service the work?
- Do we have the right professional resources available to staff the project?
- If specialized knowledge is required, do we have it?
- Do we know who our competitors will likely be for this project?
- Are we well positioned relative to our competition?
- Are the specifications written in a way that favours our competitors?
- Can we neutralize our competitor’s strengths and capitalize on their weaknesses?
- Is a partner necessary to propose a complete package?
- If yes, do we have a partner?
by Linda Saunders, © i-three communications inc.
Linda Saunders is a former GDC Associate member of the Vancouver Island Chapter and is a marketing and proposal consultant. She can be reached at email@example.com