Ask The Expert
Inclusion, transparency, collaboration, and teamworking in Bid Teams
Hi Christopher
I am creating a concise presentation for senior management demonstrating that isolating a bid manager/lead from the costing process (or any part of the team) is linked to a lower win rate due to the long list of problems it creates.
I can explain in words that the BM needs to ensure compliance, e.g. are we pricing what has been asked? Are we using the correct format and breakdown? Is there any obvious cloak-and-dagger pricing that will be perceived negatively?
I can also explain the practical difficulties it poses the BM, e.g. costs given to a BM in a lump sum do not define labour hours as an independent item; therefore, BM cannot write a programme and methodology. Also, if BM does not understand the costed solution, BM cannot competently engage with the client about target dates for PC etc. BM needs to be able to competently answer clarification requests post-award; the list goes on and on.
If I submit a commentary, it will be viewed as my opinion. Are there any in-depth studies, publications, APMP Shipley best practices on inclusion in leadership in bid teams?
Plenty of info is available on the importance of good collaboration, information sharing, teamwork, etc, from APMP and APM. But I need to be more specific to cost isolation. Graphics, charts, data, proof!
My Presentation is on Monday, so I need some help!
I really appreciate any help you can provide.
Regards,
Alex Wells
Bid Manager
Alex Wells
Hi Alex
Happy to provide some support here.
First of all, I understand that the role of a Bid Manager in your organisation includes engagement with the customer (as opposed to a pure proposal manager who is focused on the proposal document), so you are also representing a sales role (in the sense of an Opportunity or Capture Manager), too. Then, you are right to ask for being involved in the pricing process.
The main reason is that pure salespeople tend to go for a (too) low price to maximise win chances without paying enough attention to profitability and potential risks. Subject Matter Experts tend to be too conservative as they represent a conservative, technical/product perspective, generally leading to (too) high prices. The pricing manager is typically the ‘calculator’, and the Bid Manager brings in the RFP perspective, enabling the pricing manager to calculate the ‘right’ cost and the ‘right’ price.
Further, we consider the Bid Manager to be the ‘Director’ of the Bid Orchestra, orchestrating all activities during the bid development phase, and this obviously includes pricing.
So, four roles should be involved in the pricing process (names/titles obviously vary in different organisations, and two or more roles can be represented by one person, too):
Sales / Opportunity Manager / Capture Manager:
Provides input about the acceptable (= acceptable for the client) price range, ideally a defined target price (as a starting point for a top-down calculation).
Provides input about customer’s hot buttons, leading to potentially increased willingness to pay a premium.
Bid Manager:
Ensures price is compliant with formal pricing requirements (e.g. currency, format, break-down etc.).
Ensures the price reflects the required services/products as defined in the RFP.
Supports the pricing manager.
Ambassador for the right balance between costs/risks, price, and margin (Magic Triangle of the Business Case).
Subject Matter Experts (SMEs):
Provide input regarding cost items, such as required staff hours to implement the project, required software licences, required hardware etc.
Provide input regarding project risks.
Pricing Manager / Cost Manager /Calculator:
Calculates the internal business case, including the calculation of all costs, risks – based on the (cost) inputs from SMEs (Subject Matter Experts) and the target price provided by sales and the formal requirements provided by the Bid Manager. The result should include costs, risks, contingencies, margins, and as a sum, the price.
Should start with a top-down calculation, then bottom-up.
Considers intelligence about potential competitor’s pricing.
Considers internal corporate guidelines such as internal billing rates, mark-up policies, guidelines on margin levels etc.
I am happy to provide you with some excepts (text and graphics) from our reference book The Ultimate Bid and Proposal Compendium, in a separate email, shortly.
Unfortunately, I am not able to provide you with scientific or statistical evidence or study results other than my 25+ years of experience.
Happy to follow-up if needed.
Best regards,
Chris