I’ve been on several teams winning multi-million dollar federal government contract awards. And while this isn’t the definitive guide to winning federal contracts, here are a few things to be aware of for those considering entering into that world.
RFP vs RFQ
RFP is a Request for Proposal, while RFQ is a Request for Quote. Quotes are generally for commodity type products and services. Off-the-shelf hardware and software are typically RFQ’d. RFQ’s could also be for services, and in my experience, those services tend to be ones that are easily substitutable – not ones that are highly differentiated. Proposals are generally for unique services or unique combinations of products and services.
Tip #1: If you’re offering stuff that is easily substituted for what someone else is offering, look for RFQs. If what you’re offering is unique and different from everything else out there, look for RFPs.
PPQs
PPQs is short for Past Performance Qualifications. Some solicitations (typically RFPs more so than RFQs) have specific PPQs, and if you don’t meet the requirement, you’re not qualified to bid. Of course, “meet the requirement” can be open to interpretation, so don’t be dissuaded if at first glance it’s not an obvious fit. There is wiggle room…if you can get creative.
Another strategy for meeting PPQs is to partner with another entity that clearly has the specific quals the solicitation is looking for. You still get to be creative here, because you’ve got to convince the other party that there’s a better chance of winning together than they have alone, without you.
Tip #2: Especially for those just starting out, find a good partner and team with them. You may find a larger firm that has an incubator type program, where they specifically work with smaller firms and startups.
Vehicle
Vehicle refers to the umbrella contract under which the solicitation is being let. While a solicitation could certainly be free and open, there are also plenty that utilize pre-screened vehicles. Using a pre-screened vehicle makes the contracting officer’s life much easier – because somebody else has already done the vetting of the bidders.
Tip #3: If you’re just starting out, free and open is probably your only shot. That said, find out what pre-screened vehicles your target clients prefer, and figure out how to get yourself on them – or partner with someone who already is.
Special status and direct awards
Some businesses qualify for preferential treatment. You may have heard the term “8-A” or “Small Business Set Aside.” These kinds of terms refer to businesses who’ve met certain criteria, and because of that, they have a special set of rules that apply just to them. Typically, those rules eliminate a lot of bureaucracy, and that’s a great thing if you’re one of them.
Tip #4: Especially for those just starting out, investigate options for preferential treatment. And, if you don’t qualify for any, consider partnering with someone who does. It’s a great way to get going quickly.
Pricing model
Pricing model refers to how the solicitation asks you to price your services. This is typically for RFPs more so than RFQs.
FFP
FFP means Firm-Fixed Price. It means you’re on the hook to deliver 100% of the promise no matter how much it costs you. So your estimate had better be accurate. That said, if your estimate is over, you pocket the extra. Of course, if your estimate is way over, someone else will likely be cheaper…and win. Profit on FFP is maximized by minimizing expenses, including salaries.
T&M
T&M means Time & Materials. T&M typically means the client will pay you based on an LCAT (Labor Category) for your time, and then reimburse you for any materials you buy on their behalf. LCATs are typically bounded by specific requirements like years of experience in a given area, formal degree, certification, etc. The client pays you based on the hours billed per LCAT (time), plus reimbursement for materials. Profit on T&M is maximized by maximizing the spread between what you bill for the LCAT and what you pay in terms of salary.
CPFF
CPFF means Cost Plus Fixed Fee. CPFF typically means the client will pay you 100% of your cost, plus a fee on top. So, if it costs you $1,000,000 to hire people, pay overhead, benefits, etc. – and the fee is 8% – then the client will pay you $1,080,000. CPFF means you’re guaranteed to make the fee as pure profit. Of course, there’s the question of what your fair and reasonable costs are…and there’s an audit agency that will make sure you’re fairly and accurately representing your costs. And if they find you’re not, they’ll make adjustments – up and down – and even retroactively if need be. Profit on CPFF is maximized by spending more money and maximizing your cost. It’s counter-intuitive to a lot of people, but it’s true.
Tip #5: Make sure you understand the pricing model, and especially how you earn profit in that model.
Evaluation Criteria
Evaluation criteria refers to how the person evaluating your proposal will rack and stack yours against the others.
Factors
Factors refers to the several areas where evaluators will pay particular attention. Typically, there will be Cost, Management and Technical factors.
Cost refers to how you’re pricing your proposal. The criteria may state that cost as a whole is a single factor, and accounts for some percentage of the score. And, the criteria may get much more detailed on how cost is factored into the overall evaluation equation.
Management refers to your plan for managing the work. It’s not your plan for doing the work, that’s the Technical piece. The Management piece is how you’re going to make sure you get the right people on board with the right skills, retain them, etc. It’s also how you’re going to ensure that you’ve met all the requirements of the contract.
Technical usually refers to how you’re delivering the work. This is where you talk about how your approach to solving their problem is unique, different, better, etc. This is where you shine.
Look for how each of those factors will be evaluated and weighed against each other. Do a good job overall…and don’t spend a lot of time polishing something that the evaluators don’t care about.
Best Value vs LPTA
Best Value means that your proposal will be evaluated in its entirety against all the others, and the evaluators will assign weights to the factors to come up with a final score.
LPTA means Low Price Technically Acceptable. In my experience, these kinds of solicitations aren’t looking for innovation. They’re looking for the cheapest solution that barely squeaks by. And those have their place – on easily substitutable goods and services.
Tip #6: It all comes down to the evaluation criteria. Make sure your proposal addresses everything in the evaluation criteria. And, make it a no-brainer for the evaluator to find and rank your responses to those criteria. Just because something is intuitive to you doesn’t mean the evaluator sees it that way. Make it easy for them to give you a winning score.
Summary
Federal contracting can be very rewarding. If you’re considering dipping your toes into the world of federal contracting, grab a copy of my Proposal Strategy Guide below. And, if you’d like a sounding board, reach out to me in the comments. Want more confidentiality than the comments? Shoot me an email at tracy@Straightforward.Consulting.