How to Develop a Good Capture Plan—Part 2

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In Part 1, we discussed the importance of the capture plan, and how it is used in decision-making and work products development throughout the capture, proposal, and post-submittal phases.  The summary figure at right shows the decision gates and milestones that depend on the information in the capture plan and the ongoing capture activities that continue throughout the business development process, right up to contract award.

Now let’s walk through the three questions that you must answer to develop a good capture plan—one that is complete, useful to the business development/proposal teams, and effective in helping you win.

Question #1: What is it?

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The capture plan documents a detailed description of the opportunity. Document everything you learn, and be sure to cite the source and date: information may change over time, and the way it changes may reveal insights into your customer’s thinking.

Identify the customer (end-user, buyer, contracting office, contracting officer) by name and organization. Identify the customer mission, customer organization, and decision makers and their hot buttons. Document the scope of work, requirements, schedule, contract value, contract type, contract period of performance, contract terms, security classifications and clearances required, and place(s) of performance. Identify customer needs and priorities, and the driving requirements: why are they buying this (product/system/service)? Are the evaluation criteria known? If not, put forward likely evaluation criteria to use as a strawman.

Where can you get information about the opportunity? The most important source is your customer. This is where client intimacy pays off:  knowing your customer inside and out, having the ability to call on your customer, and understanding their drivers from multiple perspectives (senior leadership, program manager, technical lead, end user, contracts, etc.).  Talking with your customer, reading their briefings and press releases, attending Industry Days, and looking at their websites (organizational and program-specific) will yield critical program information. For Federal government procurements, look at Federal budget documents, such as the Exhibit 300, and carefully review Requests for Information (RFIs) and draft Requests for Proposals (DRFPs). Find old RFPs and consider using the Freedom of Information Act (FOIA) to obtain old source selection documents.

If you are the incumbent, find the capture and proposal management archives from the original bid and learn the background. Talk to your incumbent project team about the scope of work, customer needs and hot buttons, and issues—and verify their opinions with the customer. Review (as objectively as possible) your past and current performance, CPARS, award fee determination letters, and other documentation. If there are multiple incumbent contractors, use the same process for each one.

Talk to former customers, and to your own people who have experience with this customer or this domain. Talk with other contractors who are doing work for that customer. And don’t forget to talk to your competitors. All of these can be sources of insightful information for formulating your capture plan.

The answer to the question, “what is it?” is likely to change over time, especially for a larger program with a long acquisition timeline. Careful tracking of key information, dates, and sources will be critical to understanding what is changing and why.

Question #2: Can we win it?

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To determine whether your team has what it takes to win this job, consider the answers to these questions.

Have/can we create a preference for our company/team in the mind of the customer?  Develop a plan to establish/expand/exploit customer relationships, including a contact plan with key messages. Add these to your capture plan.

Can we meet all requirements? Do we need to team with another internal organization or external company to meet some requirements? Prepare a gap analysis of your capabilities against the scope of work. This will help determine whether other teaming partners are required. Prepare a make-buy analysis to determine what work is best done in-house by your company vs. obtained from an external supplier.

Do we have a solution that will meet all requirements and delight the customer? What will it take to develop or complete such a solution? When is the earliest time that we can strawman a solution to review with our customer? If we have had discussions with our customer about the solution, what was their reaction to our ideas?  Has the customer helped enhance or further shape our proposed solution? Can we help the customer shape the RFP so that it favors our solution? Remember that your “solution” is not just your technical solution; it includes your team, program management approach, pricing, key personnel, overall staffing plan, and past performance. To answer these questions, list each requirement and determine whether your solution completely fulfills, partially fulfills, or does not fulfill the requirement. Analyze the gaps to determine what is required to develop and deliver a compliant (meets all requirements) solution. If your solution exceeds a requirement, note this as a feature of your solution (and a possible discriminator—see below).

Can we meet challenging/high risk requirements, such as warranties, performance guarantees, high-level clearances, education and certification requirements, etc.? If not, can we convince the customer that we have credible mitigation plans? Are there key requirements that we would have to take exception to? The requirements analysis performed above will help answer these questions.

Can we beat the other companies that want to win it? How do we stack up against the criteria that are important to the customer? To answer these questions, perform competitive analysis and develop a bidder comparison matrix.  Use Strengths/Weaknesses/Opportunities/Threats (SWOT) analysis to analyze your strengths and weaknesses in comparison to your competition, and determine actions you can take to exploit your strengths and their weaknesses. This analysis will reveal knowledge gaps that can guide your intelligence gathering activities.

What are our discriminators? If we cannot identify discriminators, or if they are weak, can we develop discriminators? What would it take to do so? A discriminator is a feature that your customer wants, that only you can deliver.  Look at the list of features you developed in your requirements analysis, for possible discriminators. Remember that your team composition, key people, and past experience can be discriminators as well.

If we are the incumbent, can we right any wrongs? In other words, if you had performance issues on the current contract, did you recover so that your customer views your past performance favorably? Have all inquiries, corrective actions, cure notices, etc., been resolved to the point where the customer is now delighted?

Can the company commit sufficient bid and proposal (B&P) dollars, key people (especially the Proposal Manager, Program Manager, and Chief Engineer/equivalent), capital, facilities, clearances, and senior management support to the bid, given the anticipated acquisition schedule? Determine and document the needs in a capture/proposal budget, draft proposal plan, key personnel/staffing plan, and investment plan.

Can we meet or beat the price to win (PTW)? Develop the initial PTW. Then develop a pricing model to calculate your likely cost to perform the contract, and compare. Compare your likely bid price to your competitors’ likely bid prices and enter the information in your bidder comparison matrix.

If requirements or contract terms are unfavorable, can we influence the customer to change them to be more favorable to our team/solution? The deeper your customer intimacy, the more likely you are to be able to influence the requirements. Add to your contact plan the customer representatives you need to influence and the messages you want them to receive, along with the contact schedule and assignee.

The top-level summary of actions required for your company to win, coupled with your discriminators, is your capture strategy or win strategy.

Question #3: Is it worth it?

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We have seen too many bids in which a company spends thousands of staff-hours and millions of precious capture/B&P dollars before it figures out that there is no way to meet its financial goals with this program. Don’t let this be you!

Figure out whether the program is “worth it” by building the business case. A strong business case is largely, but not exclusively, a financial analysis. To determine whether the opportunity is “worth it”, consider the answers to these questions:

Is the program a strategic fit? Does it fit our business areas and core competencies? Does it fit into our strategic plan? If not, why are we pursuing it?

What are the opportunity costs of pursuing this program vs. pursuing other programs? What key people will we have to commit [who will then be unavailable for other work]? How much and what types of oversight will this program require [that will be unavailable to oversee other work]? Do we have time and resources to identify or acquire additional qualified people to backfill?

What is the potential cost of not bidding? Could you lose a line of business or market position if you don’t pursue this opportunity? Could you lose (or disappoint) a key customer? If you pass up this opportunity, how long before it will open up again?

How much investment will be required to bid and perform on this contract?  Consider the costs of solution/software development, facilities, capital investment, and obtaining security clearances. Calculate capture/B&P dollars required for responding to RFI/market research, draft RFP, final RFP, and final proposal revisions. Include the costs of oral presentations, sample tasks, bid samples, demonstrations, and videos that may be required to bid. List independent research and development (IR&D), marketing communications, and any other expenditure that may be required.

Can we successfully deliver at the likely bid price? Reference your PTW and pricing model, which you are now regularly updating. If you overbid you are likely to lose on price. If you underbid, and fail to deliver, then in addition to potential financial disaster, your company’s reputation may be ruined.

What is the expected revenue from the program, and how will revenue recognition be distributed between our company and our teammates? Between organizations within our company?

What is the likely profit on each bid element (labor, hardware, travel, ODCs)? Given the overall mix of those elements, will the program be profitable? What is the expected profit during each performance period, calendar year, and company fiscal year? How does the profit change over the period of performance?

Will the program meet our company’s return on investment (ROI)/return on sales (ROS) thresholds?

What are the risks to achieving the required financial performance? Is it possible to mitigate the risks? What will it cost to do so?

Are warranties, liquidated damages, or guarantees required, and if so, what is the potential cost?

What is the projected cash flow throughout the life of the contract? If the contract is likely to bleed for two years before showing a profit, your senior management needs to know ASAP.

Conclusion

A good capture plan drives the actions required to win, and prepares your team to write a winning proposal. XPRT can help you facilitate the development, vetting, and improvement of your capture strategy and capture plan. We can suggest tools, show you how to set up a capture/proposal library, and provide capture plan and proposal plan templates. We can help you collect and analyze information, and prepare decision papers and briefings.

Kim Haynes, CP APMP, is a senior proposal manager with more than 30 years of experience managing programs and proposals for Federal, state/local, and commercial customers. Leading winning proposal teams makes her happy. Contact her at Kim.Haynes@xprts.co to share the joy.

Paul “Korky” Korkemaz is a business development specialist—capture manager, bid strategist, and competitive analyst—with nearly 40 years of industry experience in the Federal marketplace. Contact him at Paul.Korkemaz@xprts.co.

Len Martinez, XPRT co-founder, has more than 40 years of experience in strategy development, business development, and capture; contract negotiations and contract start-up; and financial management, for commercial and Federal government customers. Contact him at Len.Martinez@xprts.co.

Joe Nash has led more than 200 Federal procurement activities in his 45 years with EPA, DOE, and as a consulting firm executive. Contact him at Joe.Nash@xprts.co.

Nancy Naumer, APMP, is a conceptual artist, graphic designer, desktop publisher, and oral presentation developer. She creates winning graphics using Adobe Photoshop, Illustrator, InDesign, and PowerPoint. She is an expert in visual thinking and production management. Contact her at Nancy.Naumer@xprts.co.

For a free XPRT consultation to assess what your business needs to bid and win US government and commercial contracts, for help with your capture plan, or for more information, contact XPRT at (844) 332-9778.