Chapter 3

Proposed Solution

Project Life Cycle

Effort
Request for Proposal

Agreement

Project Objective

Identify a Need

Develop a Proposed Solution

Perform the Project

Terminate the Project

Time

 The development of proposed solution by interested contractors or by the customers internal project team in response to a customers RFP is the 2nd phase of the project life cycle This chapter covers this phase, which starts when the RFP becomes available at the conclusion of the needs identification phase and ends when an agreement is reached with the person, organization or contractor selected to implement the proposed solution

In proposing solution, you will familiarize with

Building relationships with customers and partners Proposal marketing strategies and the bid/no-bid decision The development of winning proposals The proposal preparation process and the elements that may be included in a proposal Pricing considerations The evaluation of proposals Types of contracts between the customer and the contractor Measuring success of proposal efforts

Building relationships with customers and partners

Customers/clients prefer working with people they know and trust Relationship establish the foundation for successful funding and contract opportunities Relationship building requires being proactive and engaged. More effective through face to face meetings rather than phone calls or emails

 Contractors should get to know people in potential customer organizations on a personal basis Contacts with potential clients should be frequent and not just when there is a current opportunity for funding or just before they issue a RFP During contacts, do not focus on discussing potential contract opportunities

 Establish trust by always keeping your promises, be reliable and responsive to your customers Ethical behavior is also important in establishing trust First impression is crucial, learn your etiquette and manners Maintain a positive and can-do attitude in your dealings with clients and partners Build credibility based on performance, not just empty words Always put the clients first

Pre-RFP/Proposal Marketing
Contractors should not wait for formal RFPs to be solicited by the customers, rather, contractors need to develop relationships with potential customers long before the customers prepare RFP Working closely with a potential customer puts a contractor in a better position to be selected as the winning contractor when the customer does issue an RFP

 A contractor who is familiar with a customers needs, requirements and expectations can prepare a more clearly focused proposal in response to the customers RFP These pre-RFP or pre-proposal efforts are considered marketing or business development and are performed at no cost to the customer The payoff to the contractor for these efforts is expected to come later, when the contractor is selected as the winning contractor in response to the customers RFP

 In some cases, the contractor may prepare an unsolicited proposal and present it to the customer. If the customer is confident the proposal will solve their problem at a reasonable cost, the customer may simply negotiate a contract with the contractor, and thus eliminating the preparation of RFP and subsequent competitive proposal process

 By doing a good job in pre-RFP/proposal marketing, the contractor may obtain a contract from a customer without having to compete with other contractors

Bid/No Bid Decision

It is the process of evaluating whether to go forward with the preparation of a proposal This is because contractors must be realistic about the probability of being selected as the winning contractor Some factors that a contractor might consider in making a bid/no-bid decision are:

Competition Extension of capabilities

Risk

Mission Customer funds

Reputation

Proposal resources

Project resources

 For a contractor, success is winning the contract, not merely submitting a proposal Submitting a lot of non winning proposal can hurt a contractors reputation. So although it is often the right thing to do, sometimes the hardest thing for a contractor to do is to decide to no-bid an RFP

Developing a Winning Proposal

Submitting a proposal that meets the customers statement of work and requirement in the RFP is not sufficient to guarantee as the winning contractor In the proposal, the contractor must convince the customer that the contractor:

Understand what the customer is looking for

Will do the work professionally

Will achieve the intended result

Can carry out the proposed project

Will capitalize on its successful experience with previous related projects

Will complete the project within budget and on schedule

Will provide the greatest value to the customer

Is the best contractor to solve the problem

Will satisfy the customer

 The proposal must also highlights the contractors unique factors Proposal should be written in a simple, concise manner, not wordy or redundant. Familiar term should be used and avoid abbreviations, acronyms, jargon and other words that customers might not understand

Proposal Preparation
The preparation can be a straightforward task performed by one person or it can be a resource intensive effort requiring a team of organizations and individuals with various expertise and skills. In big projects, a proposal manager may be appointed to coordinate the efforts of the proposal team to ensure that a consistent, comprehensive proposal is prepared on time Customers do not pay contractors to prepare proposals

Proposal Contents
Proposals- often categorized into 3 sections: technical, management and cost The amount of detail the contractor includes will depend on the complexity of the project and the contents of the RFP Some RFPs may state the maximum pages of the proposal

Technical section: The objective: to convince the customer that the contractor understands the need or problem and can provide the least risky and most beneficial solution Should contain the following elements:

Understanding of the problem

Proposed approach or solution: description, methods, rationale and confirmation.

Benefits to the customer

Management section The objective: to convince the customer that the contractor can do the proposed work (the project) and achieve the intended result Should contain the following elements:

Description of work tasks Equipment and facilities

Deliverables

Related experience

Project schedule

Project organization

Cost section The objective: to convince the customer that the contractors price for the proposed project is realistic and reasonable Usually consists of tabulations of the contractors estimated elements such as:

Labor

Materials

Subcontractors and consultants

Equipment and facilities rental

Travel

Documentation

Overhead

Escalation

Contingency

Fee or profit

Pricing Consideration
Contractors need to be careful not to overprice the proposed project Contractors must consider the following items when determining the price for the proposed project:

Competition

Reliability of the cost estimates

Customers budget

Risk

Value of the project to the contractor

Proposal Submission and Follow Up

Submit on time and to the right person Make and submit electronic copies and/or several hardcopies of the proposal Send in by hand or by express mail. Customers may request contractors to send in through emails Confirm with the customer whether they have received the proposal Contact the customer in a few days to do follow up should they have any queries regarding the proposal Follow ups depends on the type of customers. Public entities/government will usually not entertain follow up calls to ensure fairness and unbiasness

Customer Evaluation of Proposals

Compliance with the customers statement of work and requirement in the RFP Contractors understanding of the customers problem or need Soundness and practicality of proposed solution

The experiences of key individuals in who will be assigned to work on the project

Management capability

Realism of the contractors schedule

Price

Types of Contracts
Before the project can proceed, a contract must be signed between customer and the contractor, which is the final step in this second phase of the cycle Contract-is a vehicle in establishing good relationship, communication and arriving at a mutual understanding and clear expectations to ensure project success An agreement between the contractor, who agrees to provide a product or service (deliverables) and the customer who agrees to pay the contractor a certain amount in return

Fixed-Price Contracts: Customer and contractor agree on a price for the proposed work Price remains fixed unless both parties agrees on changes Provides low risk for the customer High risk for the contractor Contractor must develop accurate and complete cost estimate, including the contingency costs before bidding Most appropriate for projects that are well-defined and entail little risk

Cost-Reimbursement Contracts Customer agrees to pay all the actual costs (labor, materials, etc) regardless of amount, plus some agreed-upon profit High risk for the customers, low risk for contractors Customers may demand frequent updates on the expenses throughout the project Most appropriate for projects that involve risk

Measuring Success
Contractors measure the success of their proposal efforts by the number of times their proposals are selected by customers, and/or by the total dollar value of their proposals that are selected

End of Chapter 3