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HOW IS CAPTURE MANAGEMENT DIFFERENT IN THE IC MARKET?

Monday, January 31, 2011
Dan

For some folks, capture management if a four letter word!

To get some insights, I tuned into a Federal News Radio program hosted by Larry Allen. His guest back in 2009 was Bob Lohfeld, President of the Lohfeld Consulting Group; as you’d expect, the nature of capture management is much more than just the proposal effort. (see: http://www.wfed.com/index.php?hlpage=6&nid=46&sid=1805751)

According to Lohfeld, your company’s BD team should be in contact with the client organization well ahead of the release of the RFP and should be asking good questions. Hopefully this is common sense. Questions should be asked of the client as well as your own (i.e., internal) organization. One of the most important internal questions, especially as you get closer to committing resources to the proposal effort is, “can we win?”. The account penetration should be taking place not less than nine months before the RFP hits but could begin as many as 36 months prior—for particularly complex or large procurements. And a decision to “no-bid” is a perfectly good decision. (This reminds me of an answer my brother gave me, as a kid, when I asked him how much he paid for his motorcycle helmet. After he told me the answer, I said, “isn’t that a lot to pay for a helmet?” He said with a chuckle, “well, that depends on how valuable your head is to you…”.) The point is that if the procurement is truly a must win for your organization, it will be hard to over-invest in winning.

I won’t rehash the obvious wisdom here about the process of responding to bids, except to repeat what Lohfeld cited as the Number 1 (i.e., most relevant) characteristic in determining a winning outcome when responding to RFPs: understanding the customer and their requirements. Following as a close second is the realization that people buy from other people whom they know and trust. This second point was made by the host Larry Allen but is worthy of mentioning. There is no reason to believe it’s any different in the IC.

Then what does make this capture management process different in the intelligence community? I believe there are several differences that are better labeled as sensitivities rather than outright differences.

First the commitment often has to be greater on the part of executive management. Working in a cleared environment can be more expensive than regular civilian projects (handling compartmentalized information, special recruiters, a Certified Security Officer, etc.), It can definitely test the patience and the wallet of the V.P.s in your shop.

Secondly, responding well to the RFPs requires special knowledge from the very agency that you’re bidding into. This is helpful in any bid scenario, but I would call it critical to the IC proposal effort. Contact me if you need help in this area. (dan@venonaconsulting.com ) This is not just my opinion, it is considered table stakes in bidding to the IC agencies.

Finally, the pricing needs to be very well scrutinized and truly justified for several of the IC agencies. I was surprised to see the scrutiny that one Virginia based IC agency put vendors through… and if you’ve made a mistake, it will embarrass you as well as put your profits in jeopardy. Lesson: pricing needs to be performed by someone who understands true costs, justified v. unreimbursed overhead, general and administrative costs, fee, profit, and various types of margins, etc. Details matter here. Don’t assign this to the receptionist unless he/she truly what they’re doing just because he/she is good with spreadsheets.

It’s no wonder Larry Allen, former President of the Coalition for Government Procurement, now, president of Allen Federal Business Partners, said that only one-third of the companies performing under a task order know how to truly compete for additional work! This process takes a real commitment in any federal agency but an especially deep and abiding (i.e., longer duration) commitment in the IC.

No one begins this endeavor as a prime either! They work as a sub and mature into a prime status. This gives an account team time to learn the agency and develop relationships and recruit cleared personnel.

The things that makes an IC agency contract worth the extra effort are: A) the fact that margins tend to be better in the IC market, B) the contracts tend to stay in place longer, and C) the work is a ton more interesting. And, worthy of note, especially as we’re crawling out of a global recession, is D) that the DoD and IC markets are about as stable as any market in the free world. Yeah, it can be a challenge but the best things in business (and life) are truly worth the effort.

Good hunting!

(BTW: what advise have I missed here? Post a comment!)

Comments

To expand on the "can we win" quote, there are several factors that should be considered when assessing your win probability. Some of the key factors include: incumbency; is there a current incumbent and how is their performance with this client, client knowledge; do we know and understand the needs of this client and does this client know our capabilities and performance on similar work. Also, there are internal considerations such as, do we have the right or key staff to pursue this effort, are we able to be cost competitive and are we sufficiently prepared with a budget, facilities, time and proposal staff to pursue this effort. There are plenty of subfactors to each but a careful consideration to these basic factors will begin to answer the can we win question.

By Steve Sklaris

Steve -- great input. You remind us that the go v. no-go decision is basically a probability and an ROI calculation...
Thanks for the advice (not advise as previously typed :-(
~Dan

By Dan Callahan