(8) Develop a price-to-win strategy.
As Capture Management Process Improvement Lesson Learned #7 has shown us, knowing your competition is essential to developing a winning capture plan. One element of competitive analysis is understanding the level of competitive pricing needed to win.
Developing a price-to-win strategy is critical in today’s Government contracting environment. If the acquisition strategy involves a “Lowest Price Technically Acceptable” (LPTA) basis of award, then you must carefully consider whether or not you can offer both realistic and competitive pricing, and whether or not you can execute the contract at the offered price (i.e., hire and retain staff at the low rates proposed). For many companies, part of the bid / no bid decision making process involves no bidding all LPTA opportunities. However, it is possible to develop competitive pricing in this environment through innovative staffing approaches (e.g., dual-hatting personnel to fill multiple positions) – as long as the level of effort is adequate and realistic for meeting the requirements.
Your competitors’ pricing approach WRT pricing factors such as Margins, Overhead / Burdens, Escalation Rates, Salaries, and Cost Pools are critical to determining price-to-win strategy. A pricing strategist who is familiar with the targeted market & place of performance can help you understand the required level of competitive pricing. Other sources of pricing data include:
- GSA eLibrary
- Bureau of Labor Statistics
- glassdoor.com
- O*Net Online
- payscale.com
- Salary Survey Data (ERI, Western Management Group)
- Local and On-line Networks