3

DevelopingProjectProposals

Chapter
Concepts
ChapterConcepts
Buildingrelationshipswithcustomersandpartners
Proposalmarketingstrategies
Decisionmakingtodevelopaproposal
Creating winning proposals
Creatingwinningproposals
Theproposalpreparationprocess
Elementsthatmaybeincludedinaproposal
y
p p
Pricingconsiderations
Customerevaluationofproposals
T
Typesofcontractsbetweenthecustomerandthe
f
t t b t
th
t
d th
contractor
Measuringthesuccessofproposalefforts

Learning
Outcomes
LearningOutcomes
Developrelationshipswithcustomersandpartners
Develop
relationships with customers and partners
Decidewhethertoprepareaproposalinresponseto
acustomersRFP
Createacredibleproposal
Determine a fair and reasonable price for a proposal
Determineafairandreasonablepriceforaproposal
Discusshowcustomersevaluateproposals
Explain types of contracts and various terms and
Explaintypesofcontractsandvarioustermsand
conditions
Measure the success of proposal efforts
Measurethesuccessofproposalefforts

ProjectManagementKnowledgeAreasfromPMBOKGuide

ProjectProcurementManagement

BuildingRelationships
ih
d
withCustomersandPartners
Foundationforsuccessfulfundingandopportunities
ou dat o o success u u d g a d oppo tu t es
Requiresgoodlisteningandconstantlearning
Frequentandregularcontact;expressappreciationfor
q
g
; p
pp
theclientstime
Trustiskeyandethicsareimperative
Firstimpressionisimportant
Problemsolvingandcredibilitygrowswithgood
performance
Partnerwithseveralkeyindividualsinanorganization

PreRFP/Proposal
Marketing
Pre RFP/ProposalMarketing
BegindevelopingtherelationshipbeforeRFPisprepared
g
p g
p
p p
Canhelpclientidentifyneeds
Betterpositiontowinthecontract
DevelopamoreclearlyfocusedresponsetoRFP
Develop a more clearly focused response to RFP

PreRFPandpreproposaleffortsarebusinessdevelopment
Nocosttothecustomer
Helpbuildtherelationship

Unsolicitedproposalsanduncompetitivecontracts
Resultofidentifiedneedsandproblemsolving
R lt f id tifi d
d
d
bl
l i
EliminatespreparationofanRFPandsolicitingprocess

Decision
to Develop a Proposal
DecisiontoDevelopaProposal
Developmentiscostlyandtimeconsuming
Development
is costly and time consuming
Contractorsmustberealisticabouttheirprobability
ofwinningacontract
g
Evaluatebid/nobiddecision
Many nonwinning
Manynon
winningproposalshurtreputation
proposals hurt reputation
MaybehardtodecidetonobidanRFP

Bid
or NoBid?
BidorNo
Bid?
Factors to consider
Factorstoconsider

Competition
Risk
Mission
Extensionofcapabilities
Reputation
Customerfunds
P
Proposalresources
l
Projectresources

Creating
a Winning Proposal
CreatingaWinningProposal
Sellingdocument
g
Thebestideatosolvethe
problem
Highlightuniquefactors
Emphasizebenefitstothe
customer
Besimpleandconcise
Addressesrequirements
q
fromRFP
Berealistic

Proposal
Preparation
ProposalPreparation
Proposal team
Proposalteam
Canbeonepersonormany
Variousskillsandexpertise
Proposalmanagerforlargeproposals

Proposaldevelopment
Timeforwriting,review,andmanagementapproval
LengthdependentupontheRFPrequirements
Costofproposaldevelopmentispartofnormalbusiness
costs

Proposal
Contents
ProposalContents
Three sections
Threesections
Technical
Management
Cost

Detaillevel
Dependsoncomplexityoftheproject
RequirementsfromtheRFP

Technical
Section
TechnicalSection
Understandtheneed
Understand
the need
Proposedapproachor
solution
Benefitstothe
customer

Management
Section
ManagementSection
Descriptionofworktasks
Description
of work tasks
Deliverables
Project schedule
Projectschedule
Projectorganization
Related experience
Relatedexperience
Equipmentandfacilities

Cost
Section
CostSection
Includeestimatedcosts

Labor
Materials
Equipment
Facilities
Subcontractorsand
consultants
l
Travel
Documentation
Overhead
Escalation
Contingency
Feeorprofit

Pricing
Considerations
PricingConsiderations
Competition
p
Price
Notoverpricedor
underpriced

Factors
Reliabilityofcost
estimates
Risk
Valueofprojecttothe
contractor
Customersbudget
Competitionlevel

Simplified Project Proposal

SimplifiedProjectProposal
Complex
Largenumberofpages
Defined sections
Definedsections
Chartsandfigures
Tablesofinformation

Simplified
Statementofthecustomers
need
Assumptions
Projectscope
Deliverables
Resources
Schedule
Price
Risks
Expectedbenefits

Proposal Submission and Followup

ProposalSubmissionandFollow
up
Submission
Ontime
Formatted properly
Formattedproperly
Sentinmannerrequired
Hardcopies
Email
Electronicform

Twosetsbydifferent
Two
sets by different
deliverymethods

Followup
Beproactive
Professional manner
Professionalmanner
FollowRFPguidelines

Customer
Evaluation of Proposals
CustomerEvaluationofProposals
Customersetscriteria
Customer
sets criteria
Customermayrequest
abestandfinaloffer
(BAFO)
Helpstohavecommon
p
comparisoncriteria

Contracts
Agreement
Contractmustbesigned
beforestartingwork
Establishescommunication
Agreementofdeliverables
f
foracertainprice

Types
FixedPrice

Priceremainsfixed
Lowriskforcustomer
Highriskforcontractor
For welldefined projects with
Forwelldefinedprojectswith
littlerisk

CostReimbursement

Priceforactualcosts
Highriskforcustomer
Lowriskforcontractor
Forhigherriskprojects

Contract
Terms and Conditions
ContractTermsandConditions
Misrepresentationofcosts
Noticeofcostoverrunsorscheduledelays
Approvalofsubcontractor
Customerfurnishedequipmentofinformation
Patents
Disclosure of proprietary information
Disclosureofproprietaryinformation
Internationalconsiderations
Termination
Termsofpayments
Bonus/penaltypayments
Changes

Measuring Proposal Success

MeasuringProposalSuccess
Measures
Winratio
Numberwon/number
submitted
Allproposalsweighted
equally

Totaldollarvalue
Valuewon/valuesubmitted
Moreweighttolargervalues
M
i ht t l
l

Strategies
Submitmanytowinfair
share
Increasechancesofwinning
Maybeviewednegatively

Bid on potential successes

Bidonpotentialsuccesses
Respondwherebetterthan
averagechancetowin
Musthavebid/nobidprocess

Critical
Success Factors
CriticalSuccessFactors
Customersandpartnerorganizationsprefertoworkwithpeopletheyknowand
trust.Relationshipsestablishthefoundationforsuccessfulfundingandcontract
opportunities.
Establishingandbuildingtrustiskeytodevelopingeffectiveandsuccessful
relationshipswithclientsandpartners.
Thefirstimpressiononemakesonaclientispivotaltodevelopingacontinuing
andfruitfulrelationship.
PreRFP/proposaleffortsarecrucialtoestablishingthefoundationforeventually
winning a contract from the customer
winningacontractfromthecustomer.
DonotwaituntilformalRFPsolicitationsareannouncedbycustomersbefore
startingtodevelopproposals.Rather,developrelationshipswithpotential
customerslongbeforetheypreparetheirRFPs.
g
yp p
Workingcloselywithapotentialcustomerputsacontractorinabetterpositionto
beselectedasthewinningcontractor.Learnasmuchaspossibleaboutthe
customersneeds,problems,anddecisionmakingprocessduringpre
RFP/proposalmarketing.
/
l
k i

Critical
Success Factors (continued)
CriticalSuccessFactors(continued)
Becomingfamiliarwiththecustomersneeds,requirements,andexpectationswill
helpinpreparingamoreclearlyfocusedproposal.
Berealisticabouttheabilitytoprepareaqualityproposalandaboutthe
probabilityofwinningthecontract.Itisnotenoughjusttoprepareaproposal;
rather,theproposalmustbeofsufficientqualitytohaveachanceofwinning.
Aproposalisasellingdocument,notatechnicalreport.Itshouldbewrittenina
simple,concisemannerandshoulduseterminologywithwhichthecustomeris
familiar.
In a proposal it is important to highlight the unique factors that differentiate it
Inaproposal,itisimportanttohighlighttheuniquefactorsthatdifferentiateit
fromcompetitorsproposals.
Proposalsmustberealistic.Proposalsthatpromisetoomuchorareoverly
p
y
,
y
optimisticmaybeunbelievabletocustomers,andmayraisedoubtaboutwhether
thecontractorunderstandswhatneedstobedoneorhowtodoit.
Whenbiddingonafixedpriceproject,thecontractormustdevelopaccurate and
completecostestimatesandincludesufficientcontingencycosts.

Summary
InterestedcontractorsdevelopproposalsinresponsetoacustomersRFP.
Relationshipsestablishthefoundationforsuccessfulfundingandcontractopportunities.
Relationshipbuildingrequiresbeingproactiveandengaged.
Contractorsshoulddeveloprelationshipswithpotentialcustomerslongbeforecustomers
prepareanRFP.
Because the development and preparation of a proposal take time and money contractors
Becausethedevelopmentandpreparationofaproposaltaketimeandmoney,contractors
interestedinsubmittingaproposalinresponsetoanRFPmustberealisticaboutthe
probabilityofbeingselectedasthewinningcontractor.
Itisimportanttorememberthattheproposalprocessiscompetitiveandthattheproposalis
a selling document that should be written in a simple concise manner In the proposal the
asellingdocumentthatshouldbewritteninasimple,concisemanner.Intheproposal,the
contractormusthighlighttheuniquefactorsthatdifferentiateitfromcompetingcontractors.
Proposalsareoftenorganizedintothreesections:technical,management,andcost.
Customersevaluatecontractorsproposalsinmanydifferentways.
Oncethecustomerhasselectedthewinningcontractor,thecontractorisinformedthatitis
thewinner,subjecttosuccessfulnegotiationofacontract:fixedpriceandcost
reimbursementarethetwotypesofcontracts.
Contractors measure the success of their proposal efforts by the number of times their
Contractorsmeasurethesuccessoftheirproposaleffortsbythenumberoftimestheir
proposalsareselectedbycustomersand/orbythetotaldollarvalueoftheirproposalsthat
areselected.