Complex Bids and the Case for PTW (10-09-2007)

I was reviewing a deck of slides that a former customer who is now retired -- today he hangs out a shingle as an independent FAA watcher -- will be giving at an international competitive intelligence symposium. When I got to his slide entitled "The Importance of PTW," I felt that the case that was made for Price To Win (PTW) was not strong enough, especially for an international audience. [In our experience, non-US firms bidding on major opportunities have been slow to adopt PTW as being integral to their overall capture process]. To make the point more forcefully, I supplied the following anecdote:

A while ago, CAI/SISCo got a call for PTW help from a very senior manager within a major government contractor. This gent had been on the receiving end of a pitch from an internal capture team that was preparing a bid for a large, complex, non-US government opportunity. The 90-minute briefing covered the proposed team, solution, work allocations, capture approach, competition, level of effort, the cost basis, and expected margins. The senior manager was being asked to bless the price that the bid team believed would be needed to win the job. The manager's response was: "Compared to what?"

What the bid team was asking to be blessed amounted to the sound of one hand clapping - not a whiff of an independent cost estimate (ICE) was in evidence. What the senior manager wanted was what the bid team thought the competition's likely proposals (solutions, teams, etc.) would look like and how their offerings (and the bid team's) would likely be evaluated/priced, and why. As is better known in the US, a robust PTW process provides:

• all of this information while developing hands against which a bid team can clap its solution and its bid pricing request; and
• information that management can use to assess the win probability (pWin) of a given price point.

Finding an executive (at least in the US) to make bet-the-company bid pricing decisions based on a deck of PowerPoint slides describing a solution would, at best, make them derelict in their duties, or, at worst, potentially put them on the wrong side of Sarbanes-Oxley.

Good luck and happy hunting!