Proposals & Competitive Tendering Part 2: Managing Winning Proposals (Second Edition)

Proposals & Competitive Tendering Part 2

Managing Winning Proposals

SECOND EDITION

Richard Brookfield

Published by Acuity Business Consulting Ltd

EB ISBN: 978-1-9999273-6-3

Copyright 2020 Acuity Business Consulting Ltd

All rights reserved. This ebook is licensed for individual use only and may not be re-sold, distributed or shared. No portion of this ebook may be copied or reproduced without the express permission of the publisher, contactable at publishing@acuity-business.com.

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TABLE OF CONTENTS

PREFACE

CHAPTER 1 INTRODUCTION TO PROPOSAL MANAGEMENT

CHAPTER 2 THE COMPETITIVE TENDERING PROCESS

Why do Customers Use Competitive Tendering?

Essentials for Customers

Success Factors for Contractors

Key Points

CHAPTER 3 THE PROPOSAL MANAGEMENT PHASE

Customer Activities during the Proposal Management Phase

Contractor Activities during the Proposal Management Phase

Contractor Decision Framework

Key Points

CHAPTER 4 THE PROPOSALS FUNCTION

Proposals Capability

Proposals Administration

The Proposal Manager Role

Key Points

CHAPTER 5 THE REQUEST FOR PROPOSAL & DECISION TO BID

The Request for Proposal (RFP)

RFP Package Review & RFP Summary

Finalizing the Win Strategy

Decision to Bid

Key Points

CHAPTER 6 PROPOSAL PLANNING

The Proposal Theme & Key Messages

Proposal Winning Tactics

Setting the Proposal Index

Proposal Schedule & Resources

The Proposal Plan

Key Points

CHAPTER 7 PROPOSAL PREPARATION

Proposal Management

Interaction with the Customer

Proposal Writing – Style & Language

Proposal Content

Joint Venture Proposals

Tendering as a Subcontractor

Key Points

CHAPTER 8 PROPOSAL COMPONENTS – THE FRONT END

The Front End of the Proposal

The Front Cover

The Covering Letter

Checklist or Guide for Evaluators

The Executive Summary

The Introduction Section

Key Points

CHAPTER 9 PROPOSAL COMPONENTS – THE TECHNICAL PROPOSAL

The Technical Proposal

The Execution Plan

The Schedule

Organization Charts

Key Personnel Details

Key Points

CHAPTER 10 PROPOSAL COMPONENTS – THE COMMERCIAL PROPOSAL

The Commercial Proposal

The Form of Tender

The Tender Bond

Schedules of Work Quantities

Schedules of Prices & Rates

Contract Terms & Conditions

Key Points

CHAPTER 11 REVIEWS & APPROVALS

Review & Approval Requirements

Functional Perspectives

Technical Reviews

Commercial Reviews

Key Points

CHAPTER 12 CLARIFICATION, NEGOTIATION & CONTRACT AWARD

Evaluation of Proposals

Clarification Meetings

Contract Negotiation

Handover to Operations

Debriefs & Lessons Learned

Key Points

LIST OF FIGURES & TABLES

LIST OF INSIGHT TOPICS

ABOUT THE AUTHOR

INTRODUCTION TO PART 1 STRATEGY & POSITIONING TO WIN

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PREFACE

ABC SmartGuides are compact and practical reference books, written for business professionals engaged in strategic, sales and commercial roles connected with company strategy and the competitive acquisition of new business. Background information and explanatory text are combined with practical examples and templates, enabling readers to extract and apply relevant principles within their own organizations.

These guides are aimed primarily at individuals working in projects and services organizations where competitive tendering is the norm. The principles will also apply to companies competing for new business in B2B products sectors.

The first SmartGuides to be published cover the topic of Proposals & Competitive Tendering in two parts:

- Part 1 Strategy & Positioning to Win, from identification of a new opportunity through company positioning, customer engagement, strategy development and pre-qualification to the issue of the Request for Proposal;

- Part 2 Managing Winning Proposals, from receipt of the Request for Proposal through proposal management, winning themes, proposal preparation, clarification and negotiation to the point of contract award.

Subsequent SmartGuides are planned to cover Strategy & Business Planning, Sales, Marketing & Business Development, and Customer Relationship Management.

ABC SmartGuides are published by Acuity Business Consulting Ltd, an independent UK-based consultancy providing a range of consultancy and professional development services.

This Second Edition of Managing Winning Proposals features significantly expanded information, including separate chapters on the front end material and the technical and commercial proposals. Insight panels have been added throughout the book, which is now fully indexed.

www.acuity-business.com

About the Author

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Back to Table of Contents

CHAPTER 1

INTRODUCTION TO MANAGING WINNING PROPOSALS

This book provides a guide to the Proposal Management phase of the competitive tendering process, which starts when a Request for Proposal or RFP has been issued, as shown in Figure 1. This is a key period during which contractors must prepare high-quality and competitive proposals and be prepared to negotiate commercial terms with customers to secure contract awards.

Chapters contain a practical combination of background information, explanatory text, timelines, examples, models and templates. The book does not seek to provide a single prescriptive method, nor a rigid system of detailed pro forma. Instead, the objective is to set out the principles for success at each stage of the process, so that readers can follow topics, wholly or selectively, as required and can adapt models to be relevant to their own organizations.

Competitive tendering is widely used by customer organizations in both public and private sectors for selection of their contractors and suppliers. There are several drawbacks to this approach, not least the potential for erosion of trust and relationships, but the process is effective and enables customers to show impartiality in the award of valuable contracts. In short, the benefits are generally accepted to outweigh the negatives and sole sourcing of suppliers is unusual for contracts of any significant size.

For contracting and services companies, the ability to secure profitable work through competitive tendering processes is essential to survival. Companies must therefore develop and maintain an effective bidding capability at the heart of their business. This may be a small team or a large dedicated Proposals department; in either case there must be a capability to prepare competitive proposals and negotiate contracts on acceptable terms.

This book covers the contractor’s proposal management activities, starting once the customer’s formal Request for Proposal has been received. An organized approach to proposal preparation and the subsequent clarifications and negotiation discussions is essential to success in the competitive tendering process. Key themes running through this book include the following:

- the importance of the Proposals function and the role of the proposal manager;

- the significance of the previous Strategy & Positioning activities and Win Strategy in preparing for the Proposal Management phase;

- the importance of a strong proposal theme and key messages;

- the need for an efficient and organized approach to proposal preparation;

- the involvement and influence of multiple functions and stakeholders within the contractor’s organization;

- the need for multiple internal reviews and approvals.

The book is divided into chapters described as follows, each including an initial summary section and a concluding list of key points for ready reference.

Chapter 2 provides an overview of the whole competitive tendering process and its various strengths and weaknesses. There is a need for customer organizations to make the process attractive for potential tenderers and the essential success factors for customers are set out in some detail. Success factors for contractors are also covered, including the need to understand the customer and to prioritize customer satisfaction on existing contracts.

Chapter 3 gives an overview of the Proposal Management phase, including activities undertaken by the customer and the contractor as shown in the timeline in Figure 3. The decision points for the contractor are described and a typical decision framework for this phase is defined in Figure 5.

Chapter 4 describes the Proposals function and its key role in organizations reliant on competitive tendering to secure new business. The importance of a procedural framework is highlighted for coordination across the company functions, together with annual budgets and a sales database for tracking opportunities and resource forecasts. The challenging role of the proposal manager is outlined, including responsibility for coordinating multiple internal and external stakeholder groups.

Chapters 5 to 12 cover the successive stages in the Proposal Management phase in more detail as defined in the timelines in Figure 8 and Figure 11. Chapter 5 covers the review of the RFP package and preparation of the final Win Strategy based on the previous work from the Strategy & Positioning phase. The various aspects of the Decision to Bid are described including the different perspectives from stakeholder groups and the tendency to delay making decline decisions.

Chapter 6 describes the initial proposal planning activities, which must be completed as quickly as possible after receipt of the RFP package. The development of the proposal theme and key messages is described as well as the importance of applying proposal winning tactics. The planning activities also define the contents structure, schedule and resource allocations for proposal preparation.

Chapter 7 covers the intensive period of proposal preparation activities, led by a proposal manager responsible for managing multiple interfaces and for organizing all necessary technical and commercial inputs. This chapter includes guidelines on proposal style, language and content, summarized as 'Dos and Don'ts' in Table 8.

Chapters 8, 9 and 10 describe the preparation of the various parts of typical proposal documents. Chapter 8 covers the introductory 'front end' material including the front over, covering letter and the executive summary highlighting the company's proposal theme and key messages.

Chapter 9 describes the contents of the technical proposal and their preparation. The execution plan, schedule, organization charts and personnel details together cover the how, when, where and who of the proposed approach and must all be consistent.

Chapter 10 describes the preparation of the commercial proposal including the estimation of quantities and costs, calculation of pricing and the submission of qualifications to the customer's contract terms and conditions.

Chapter 11 sets out the reviews and approvals required to authorize proposal submissions, generally defined in a company procedure according to proposal value. Technical reviews typically include the execution plan and schedule, whilst commercial reviews are focused on pricing and contractual terms and conditions.

Finally, Chapter 12 covers the post-submission activities including clarification meetings and negotiations with the customer leading to contract award for the successful bidder.

Terminology may vary between different countries, sectors and companies. The terms that have been used consistently throughout the book are listed below, together with some alternates and equivalents.

contractor –