Bloomberg: Vendors Use Software for Edge in $532 Billion U.S. Contract Market

Fergal McGovern

CEO & Founder

Published
Length
4 min read
Bloomberg

2011-08-15 04:00:01.2 GMT

By Leah Nylen, Bloomberg Government

August 15 (Bloomberg) — After a year and a half’s work, Eric Gregory’s team at CACI International Inc. was getting close to submitting their proposal for a federal government contract when he realized a key document was missing.

Within five minutes, Gregory found it had been misplaced in another folder, using custom software that can sift quickly through documents and a proposal that had dozens of components and was several hundred pages in length.

“I have had experiences where this created major problems on proposals before,” said Gregory, CACI’s vice president of capture and proposal development. The software “saved us time, money and rework.”

Federal contractors have adopted elaborate metrics and data-management processes to determine when and how to bid on work, said Rick Harris, executive director of the Association of Proposal Management Professionals. Now some are turning to tools that help automate some of the myriad aspects of a bid.

Far from replacing the networking skills that have often driven business success in government contracting, these new computer tools add a new element to vendors’ competitive efforts. The processes have helped some companies win as many as 90 percent of the bids they submit, Harris said.

“It’s the people and the process that determine a win or a loss,” Harris said in an interview. “There are teams that are working in different states or different parts of the world. You need that collaboration software so you can update in real time.”

$3 Million Gamble

Vendors often risk 1 percent to 3 percent of the total value of the contract on proposal efforts before knowing whether they’ll win the bid, said Robert Lohfeld, chief executive officer of Lohfeld Consulting Group Inc. and a former division president at Lockheed Martin Corp.

For a $100 million contract, that might amount to a $1 million to $3 million bet. Many proposal managers still do most of their work by hand, marking up documents and sending them via e-mail or traveling to another location to work with a team at its “war room.”

That face-to-face approach can be expensive, said Michelle Petty, owner of Propel Consulting Inc., a proposal consulting firm in Austin, Texas. For one proposal in 2009, the client paid more than $70,000 to bring 15 people on-site for three weeks, she said.

“That’s a huge expense,” Petty said. The total cost of software “is going to be much less expensive than having people continuously travel to different locations.”

Automation Tools

Dozens of automation and collaboration tools are now available as companies seek ways to create virtual war rooms and make the proposal process more efficient.

At CACI, proposal teams use Privia, a product developed by closely held SpringCM, to pull in information from government web sites on an agency’s needs and pull in market research or analysis on previous contracts for the same work.

CACI’s capture management team can also upload documents, such as information on potential competitors or teaming partners, and if it decides to bid, the software helps manage version control, audit trails and real-time collaboration on the hundreds or thousands of pages that go into a proposal.

SpringCM’s pricing starts at $16,000 and varies depending on the number of users and hosting options, Michelle Sullivan, a spokeswoman for the company, said in an e-mail.

Bid Tools

Another tool, VisibleThread, scans documents and suggests wording changes to make the language clearer and remove legal liability, said chief executive officer Fergal McGovern.

Proposal Software Inc.’s PMAPs 2011 specializes in proposal assembly, helping vendors manage the process by pulling from a trove of documents to quickly put together proposals and responses, said John A. Laurino, chief executive officer of the closely held Westport, Connecticut company.

Nearly nine out of 10 proposal managers said adding automation tools would improve their “win rates,” a metric that measures how often a company succeeds in its contract bids, according to a May survey of 102 industry professionals conducted by VisibleThread at the APMP’s annual conference.

Some long-time proposal professionals are less enthusiastic about the use of automation tools. Creating a defined and repeatable process is the key to improving win rates, said Hélène Courard, vice president for corporate capture management at Salient Federal Solutions, an affiliate of Chicago-based private equity firm Frontenac Co. LLC. If you don’t understand the concept of multiplication tables, using a calculator isn’t going to help, she said.

No Panacea

“Automation can certainly help in some areas,” said Courard. “But I don’t think it’s the panacea.”

Shipley Associates Inc., one of the leading proposal and business development companies, has stayed neutral on the use of automation tools, said Brad Douglas, the firm’s vice president for business development. Based in Davis County, Utah, Shipley counts Northrop Grumman Corp., and Hewlett-Packard Co. among its clients.

The company developed a 96-step process, the Shipley Business Development Lifecycle, which forms the basis for the proposal process used by many federal vendors. Some of the major steps include identifying potential opportunities that fit with a company’s long-term goals, assessing the opportunity to define likely competitors, and planning the bid strategy and pricing structure. Shipley recommends using content management software so that a vendor can reuse content across proposals, said Douglas, who has worked for the company for 21 years.

Limits to Automation

“If you try to automate much more than that without a disciplined lifecycle process, it will probably fail,” he said. Using Privia and other automation tools has helped CACI increase the number of proposals it works on each year, Gregory said.

It also lets him track the progress of each opportunity or proposal without having to meet with the team for an update.

“As we become more practiced at using these environments, it will have a significant effect on our probability of win for any opportunity and will perhaps increase our win rates,” Gregory said.

“Using these tools will have a positive effect on revenue growth and profitability over the long haul.”

For Related News and Information: Top government news: GTOP Contracting stories: TNI ORDER BN Legal contracting news: TNI LAW ORDER

–Editors: David Rapp, David Ellis

 

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