This is a guest post by Keith Stadler of KSA, LLC.
Note from Bill: In last week’s guest post by June Jewell, we looked at project manager accountability. We’ll continue that theme with this look from Keith Stadler at the importance of accountability – authority and responsibility – across your company.
Straightforward organizational challenges can have well-defined solutions around which general agreements are easily made. But for serious matters, the challenges, let alone solutions, are rarely straightforward.
Problems like this are complex, difficult, mysterious, and sometimes require gut-wrenching choices, if properly addressed. This is where a clear understanding of the authority and responsibility to secure the right outcomes is essential.
Surprisingly enough, in many organizations, the matter of making clear in whom the responsibility and authority lays for tasks, projects, and processes is ambiguous; unstated and left to the imagination of the workforce, including the person who will ultimately be seen as the “responsible party.”
It’s not difficult to visualize the effects and results of this kind of arrangement. A consensus-based dynamic necessarily takes over:
- Outputs are the “lowest common denominator” outcome on which all can agree.
- Co-corkers minimize the impact of collaboration on their office rather than maximizing broader organizational benefits.
- Innovation, creativity, adaptation, critical thinking, and advocacy are discouraged, even punished.
- Outspoken personalities dominate collaboration.
- Everyone has a veto, knows it, and feels empowered to exercise it.
- Projects and processes can and do stop altogether when a single party refuses to act.
- It can be difficult to determine if a decision or outcome was reached at all.
- There are minimal or no sustainment of outcomes.
- People simply refuse to show up for planning sessions and meetings.
- Consensus accommodations are made to work around the personalities involved instead of doing what is best for the organization.
- The status quo usually prevails.
So much harm comes of this kind of gap in an organization, but it’s so simple to avoid. Here are 12 things that leaders at every level can do:
- Explicitly and clearly identify the person responsible and confer on her or him the authority need to complete the task, project, or govern the process.
- Make it known to all the participants and their bosses.
- Put it in writing.
- Empower the collaboration effort with your own clear intent. Tell the leader, his team, and their bosses, what is the purpose, a little about the method of getting there, and what the final product will be in your mind.
- Tell them what it is not.
- Be available for follow-up discussions and interim guidance as work proceeds.
- Ask how it is going.
- Make it evident to all that the person in charge is answerable for the final outcome by engaging them as the group leader.
- Ask how you can help the project leader, then do it.
- Precisely capture any decisions that are needed along the way and act on them.
- Follow up with the project leader to ensure that progress is being made. If not, find out why and help fix it.
- Publicly praise and thank the team and especially its leader. Tell their bosses too.
These things easy to do and will be appreciated by everyone involved. Over time, employees will embrace the company’s approach to authority and responsibility and it will become second nature.
Keith Stadler is the founder of KSA, LLC, a company dedicated to advancing organizational visions and fundamentally transforming how businesses everywhere are run. He has over 40 years of leadership experience in organizations from the very large and established to small technology start ups, and everything in between. Visit www.ksaintergration.com for more information.
This is a guest post by June R. Jewell, CPA.
While most project consulting firms expect their project managers (PMs) to deliver profitable projects, many have not put the appropriate measures in place to ensure that it happens. Accountability at the PM level is often vague and unstructured, which can lead to several different consequences – but not the ones we want!
Part of this issue has to do with the many responsibilities given to PMs, and a lack of true visibility into what they are really doing every day. This leads to PMs being given many tasks and little guidance as to how to be successful.
The other big challenge is measuring results. The majority of firms that we work with are not tracking individual performance, or worse, failing to implement consequences even if it is being measured. This has the unwanted effect of grouping good and poor performers together, and the less desired result of passive aggressive behavior on both the PM’s part and the firm’s leadership.
The following are practices that I often see in many project consulting firms that undermine their ability to achieve profitability goals. If you recognize any of the following issues in your firm, they could be costing you a great deal of money! Lost dollars can be found by ensuring that every project hits target profits. If you see any of these practices in your firm, they need to be addressed as soon as possible:
- PM performance is evaluated in an annual review – The annual review is a dreaded process in many firms. Even with top performers, many employees don’t feel adequately recognized, and feedback is often provided too late to make a difference to performance results. A more frequent process of project review can improve financial results and engage employees more in the process of improving their own performance.
- All PMs are given a raise and/or bonus regardless of performance – With the war for talent gaining intensity these days, many firms are afraid of “calling out” mediocre performance. This has the double negative outcome of dis-incentivizing both top performers who don’t see the benefit of going the extra mile, as well as not giving consequence to poor performers for failure to hit goals. Bonuses and raises need to be tied to financial results in order to impact behavior.
- All of our offices do things their own way – This is a common problem in firms that have remote offices, and especially when there has been an acquisition. Many offices take on their own culture, and create their own new processes – from proposals and estimating, to project budgeting and billing. This has the negative impact of making it difficult for leaders to compare one office to the other, determine what is working and not working, and share best practices between groups. It is critical to a profitable firm to get everyone following best practices and operating the same way.
- We never fire anyone – The combination of a family-oriented firm culture along with difficulty finding technical staff has created an environment where many firms tolerate poor performance. This leads to keeping PMs and staff that are actually hurting the profitability of the firm rather than contributing to it. The message that is being delivered to staff is that mediocre or poor performance is acceptable and the ultimate consequence – being terminated – is not a possibility. Without this consequence, it will be very difficult to change behavior or increase profitability.
- We do not have metrics to measure our PMs – How you report on performance is a big indicator of how employees will perform. Many firms choose to measure profit centers, business units, offices, etc. rather than focus on individual results. Without metrics and financial targets, it is much more difficult to evaluate PM performance, and hold them accountable for results. Looking at project profit margins is the most effective way to compare PM performance and the first step to holding them accountable.
All of these flawed business practices add up to lost dollars. So what is the cost of ignoring or even rewarding mediocre or poor performance? It may be much larger than you imagine. On top of the measurable costs of project overruns, rework and scope creep, consider the intangible costs of frustrated staff, unhappy clients and failure to retain your best PMs. This can add up to thousands and even millions of dollars per year in some cases.
Focusing on and improving your firm’s performance management practices can have a huge impact on all of the key metrics you use to measure the health and results of your firm. Special attention should be given to creating a regular rhythm of feedback, establishing clear measures for individual performance and implementing meaningful consequences for attaining financial targets.
This post was originally published on the AEC Business Solutions blog at http://aecbusiness.com/holding-project-managers-accountable-for-profitability-blog/ and was adapted and reprinted with permission.
June R. Jewell, CPA, is the president and CEO of AEC Business Solutions and the author of Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering and Environmental Firms. Her popular blog covers innovative ideas on business leadership, project management processes, business development and improved operational efficiencies. Register for one of her upcoming webinars at http://aecbusiness.com/webinars/.
This is a guest post by TAPE Communications Specialist Walt Long.
My name is Walt Long and I work for TAPE as a communications editor and reviewer, with a special focus on our company’s color teaming process.
Color teaming a proposal document is a kind of “group editing” of the content. While I was already very familiar with editing a document on my own for clarity, grammar, and word flow, this multi-person process of sculpting a draft into a strong proposal was a new challenge for me.
Color team reviewing of the documents and graphics within a particular proposal not only involves editing by one’s self, but also includes presenting your edits and general experience of the document to others. This happens in a series of team review meetings, with each team identified by the colors pink, red, gold, green, and white.
Color team participants are made up of writers and reviewers, each with very different roles to play. I have learned that it’s important to assign the right people to write to the particular volumes required by the government’s formal parameters for each proposal.
There will be representatives from each team of Prime and Subcontractors, both employees and hired subject matter experts (SMEs)/consultants. It’s also important to line up experienced reviewers who can see things from the perspective of the government evaluators and explain what specifically is missing.
The color names given to different teams tell you which part of the editing process is being conducted. While individual companies may assign the colors somewhat differently, here is how I understand the color distinctions:
The Pink Team is the starter group, who clarify what the federal government is actually requiring be included within a particular proposal, and agree on an outline.
Next is the Red Team phase, where more focus is placed on refining certain sections for universal themes such as Corporate Capability, Transition Plan, Technical Approach, Management Plan for Primes and Subcontractors, Sample Task Order, etc. In addition to refining content, Red Teams have to look at the actual size and look of the proposal by considering page counts, the ratio of graphics to text, and the clarity of graphics and charts.
Meanwhile, on a parallel effort, away from this mostly word-centered review of the proposal, the Green Team is a separate group of folks who look at the always delicate task of what financial numbers will be presented in the proposal. Green Teams are made up of those with company proprietary information about how much to pay individual positions as well as how much to propose to the customer i.e., the government client.
Pricing is always both an art and a science when it comes to proposals; too high is always a risk but too low means that in the eyes of the customer, you are not facing the realities of the work in question, nor might you be able to hire and keep the talent needed to fulfill the contract.
Next comes the Gold Team, whose reviewers take in the entire proposal. These participants must have both the authority and the time to read their assigned volumes in their entirety, line by line. While Pink and Red Teams usually discuss their edits by phone, in my experience Gold Teams present their edits directly to the writing/production team.
Finally enters the White Team also known as “White Glove,” where basically every one of the final editors and compilers gets one more chance to look over the document for obvious mistakes or any visual space or sizing problems. This final edit and production phase is just as important if not more as all the work that has led up to this point. It is their job to create a physical hard copy of the entire document must now make it physically into hard copy via either CDs and/or paper, then be physically delivered.
In other cases the customer has asked for the information in electronic-only form, in which case software issues and transferring the information over the web by the deadline become the make or break process for the entire effort.
Here are a few caveats for effective color teaming I have learned along the way:
- Find or hire the best writers and reviewers you can afford. Such expertise pays off in the end.
- Writing and reviewing proposals is difficult work, dealing with large volumes of complicated information. Those in charge of the teams must allow enough time for both sides to finish their tasks with reasonable and professional process. (Having the right people who specialize in the writing or reviewing of their assigned parts goes a long way towards the efficiency needed.)
- If you are a color team writer or reviewer, it’s best to put your ego off to the side, and hear (or give) criticism as graciously and honestly as you can with only one thing in mind: What will make this document a winning proposal in the eyes of the customer? Towards that end, everyone’s opinion can be valuable and needs to be heard, within reason. Those who see things differently must be encouraged to speak up, while the others must refrain from judgment. It is this process of considering and using different perspectives that is the heart of the color teaming process.
During my experience as a newcomer to color teaming, I have learned that it is an expensive and time consuming prospect, meaning that some proposals/documents are simply too small in size and scope to justify such outlay of a company’s limited resources.
That being said, I also think that such a process is a very good way to sculpt and process a proposal or any other document from start to finish. If done right, you get a finished product that has been examined from many different points of view, resulting in a polished and evolved document.
This is a guest post by Eileen Kent, The Federal Sales Sherpa.
One of the biggest mistakes in federal contracting is to set up a keyword on FBO.gov and wait for the bid opportunities to land in your email Inbox and read yourself into them, “This is PERFECT for us!”
Another mistake is to consider writing a loser bid just because you think it’ll “Get our FOOT IN THE DOOR.”
But, the worst mistake in federal contracting, however, is to take a year of your time to fill out the GSA Schedule Application – when you have no proof that the agencies which buy exactly what you sell even use the GSA Schedule to procure your products and services! Even worse than that is to go through the pain of building this contract vehicle/bridge and waiting for the contracts to drive in the door.
Here’s a shocking fact: GSA drops contractors who are below the $25k minimum sales requirement after the first two years! Take a look at how they dropped 1,000 vendors off the IT70 schedule in 2014 as reported by Federal News Radio.
So what should you do when you see an opportunity that is a fit for your company?
First, comb the bid for names, numbers, addresses and locations and add them to your federal sales action plan or marketing database for your sales team to begin developing relationships for next time. You can find the contact intelligence at the bottom of the solicitation and sometimes you can find end user names hidden under the title of Contracting Officer Technical Representative.
Second, do your homework and take the time, before you write a bid, to make a rational bid/no-bid decision.
When everyone is seeing green and thinking “this is perfect for us” through an opportunity discovered on federal bidding website, take the time to perform a bid/no-bid decision and remember, the bid effort will cost you a lot of time and money.
Here are 10 questions to get the bid/no-bid discussion started:
- Who is the incumbent doing the work or delivering the products to that agency?
- Who is the Contracting Officer, the Contracting Specialist and anyone else involved in the process? What are their specific bidding protocols? What contract vehicle/hallway/bridge are they going to use? Do you have that exact contract and are you able to “reach” the bid or do you need to use a partner instead? Are they going to set it aside for a specific small business preference? Do you have it? Does a teaming partner have it?
- Is it posted at GSA eBUY or through the Acquisition Gateway through another contract vehicle/hallway like SeaPort-e or SEWP? Do you even know what the Acquisition Gateway is and do you have partners who will keep an eye out for the opportunity for you? If it’s posted on FBO.gov, why is it posted up there, when they could have easily used a current contracting vehicle/bridge/hallway?
- Do you know the story behind the posting of that bid? Are they looking for something so unique it’s difficult to find or is it such a high-profile project that they need to show publicly that they opened it up for all to see? Is it a multiple award Indefinite Delivery Indefinite Quantity contract (MA-IDIQ)? If so, this doesn’t guarantee business – it’s a contract bridge, or vehicle, or hallway — so they can run tasks through it for the next one-five years. If you bid an MA-IDIQ are you ready to handle the sales activities to drive business across that MA-IDIQ? Do you have a proposal team ready to respond to the multiple bidding opportunities after the so-called MA-IDIQ “win”?
- Did your sales team talk to the end user shopping for this service or product and did your team help at all in the client’s discovery meetings prior to the bid? If you don’t think you’re allowed to do so, read the mythbuster articleat the Whitehouse website. It says yes you can speak with people prior to the bid being released, according to FAR 15.201 which says the government is encouraged to discuss innovations with industry.
- How do you know you’ll win? Do you know their budget (also called the Independent Government Cost Estimate or ICGE)? Do you have exactly what they told you they wanted? Do you understand the scope of work and do you have any intelligence about the scope besides what is written in the bid? Can you deliver on-time, within budget and still make money?
- Are you filling in gaps in the bid on areas you don’t cover and trying to find a partner at the bidding point?
- Are you offering the name brand they requested or the equivalent?
- Are you wasting the government’s time by asking way too many questions and supplying a shoe-horn fit proposal because you don’t understand the scope of work? How is this making you look good for future opportunities? How is this getting your foot in the door? Why not, instead, book a flight to the agency, and stick your foot in their door? In other words, why not start making calls for next time, build some relationships, set appointments, perform capabilities briefings and get to know them first?
- How many of these answers are while you’re “seeing green” or experiencing “wishful thinking?”
Third, if you are puzzled by these questions, you need to learn the federal sales and proposal game so you can walk into this marketplace, visiting the agencies who buy what you sell with intelligence about their current incumbents and understanding the appropriate strategies to go after business well before a bid hits the streets.
If you’re blindly writing a bid that is “perfect for us” to “get our foot in the door” and you’re “seeing green” with every opportunity that crosses your screen – with no intelligence whatsoever – you’re going to lose not only the bid but a lot of respect and heart from your employees who spent late nights and weekends preparing the bid just to appease you. You’re going to lose a lot of time and all of that hurts the bottom line.
Implement a bid/no-bid process and you’ll begin the realization that you need to invest more on sales activities prior to bidding opportunities – and less time writing proposals.
And in 2016 – make this your motto:
Write Less – Win More.
This post was originally published on LinkedIn at https://www.linkedin.com/pulse/did-you-find-federal-opportunity-posted-fbo-which-think-eileen-kent and was adapted and reprinted with permission.
Visit Eileen’s website, The Federal Sales Sherpa.
It’s that start of the year reflective time again, and a recent conversation reminded me that the fundamentals of strategic planning come down to two things:
- Focus on what you do well.
- Organize to support your customers.
From that, opportunities will flow, and the right outcomes will be there
For example, we were talking to this large company, one of the big integrators. A couple of years ago they were organized by customer, e.g., Navy, Army, Justice, which meant that there were functional departments (e.g., IT, security, training) in every one of those lanes.
Now they’ve transitioned to being a functional organization, which means that their business units are organized by function. There is an IT unit, a training unit, and so forth. That makes a big difference to how they use sub-contractors, and so in order to do business with them we need to organize and plan our outreach efforts accordingly.
We’ve had many conversations over the years on this blog about focus, and about building relationships that have depth and quality to them. The same principles apply to your capabilities, so that you focus on doing a few things well as a small business and not try to do all the things that come your way to produce revenue.
I know this is easier said than done. Frankly, the hardest thing to do is say ‘No’ to potential revenue when it doesn’t fit.
Focus helps improve the P-win (Probability of Win) because you will have done the work to have a customer relationship, and you’ll have the functional capabilities that match the customer’s need.
But this recent conversation illustrated another aspect of focus – organizational structure (customer versus capability sectors). Quite frankly, this is an age-old dilemma. Customer focus is where you laser in on the relationship and get it really deep, and then there’s a foundation to build. Capability focus is where your SMEs are all working together and humming on the work they do.
I wish there was a single answer that always works for every company. Probably it changes with time and portfolio mix of customers and/or capabilities. The dilemma is that in either case, some set of people will be matrixed across sectors. If you’re capability organized than it’s the customers, and if you’re customer organized it’s the SMEs.
Think about which is right for you, and then stick to your guns.
There is a whole set of processes that are launched upon winning a new federal contract. Let’s look at some of the things to expect. Of course, the first thing is to get the award – the actual notice of award. However, in the federal sector even that’s not just a single event.
The first thing that happens is you’ll start to hear rumors that you’ve won. There may even be some negotiations between you and the customer to discuss terms.
Before a contract can be awarded, there is a three-day notice to the losers, which essentially announces who the apparent winner is. The purpose of giving this notice is to allow the companies that did not win to submit size-standard protests.
Size-standard protests are the government’s way of policing the process (or allowing companies to police each other), to make sure that the winning company is truly eligible as a small business under the specific NAICS code for this particular contract. There are times when, for a variety of reasons, people are found to be non-compliant, even when they’ve already been on the contract.
Unfortunately, sometimes competitors can be over-zealous with their due diligence, and may incite a protest without having all the facts. For example, a company I knew was the subject of a protest because their website listed billions of dollars worth of contracts they had won. Yet some of these were multiple-award IDIQs and the amount of work they actually won under them was quite small.
Another part of the process is the debrief. Here, any of the losing companies – or the winner – can request a debrief where you get an official explanation of how the government evaluated your proposal and where you fit vis-à-vis the winner, though you’re never told what other businesses may have scored on their proposals.
The protest period lasts for 10 business days from the date of award. It’s important to understand that all of these pre-award and post-award days count as part of the transition time specified in the contract. So you need to start transitioning.
Key elements of a transition
It is a certifiably bad idea to not plan out your transition in as much detail as you can, understanding your activity set and knowing the accountable people. This is the first action you will be taking on a new contract with a new customer; you are building a critical relationship for the future.
Make sure you have the people necessary for the contract, and that you have a place to house them, along with any equipment they’ll need. Or if they’ll be working at the government site, you must know the security requirements to access the computers and other government facilities.
If you have subcontractors you need to have the contract in your hand, and a subcontract document in their hands. In order for them to proceed, you may need to give them what’s called an authorization to proceed – the verbal authority that allows someone to take action even though the legal document is not in place yet during the transition.
Meet with your new customers frequently during the transition and beyond, whether informally or formally. Not only are you building a relationship, but this is a way for the customer to give you the information you need to be successful. If all goes well, you will have a contract for as long as it lasts.
As our good friends at PilieroMazza reported in their weekly update newsletter on October 10th, “SBA issued a proposed rule to amend its regulations to implement Section 1614 of the National Defense Authorization Act for Fiscal Year 2014.
The proposed amendments authorized by this statute would allow an other than small prime contractor that has an individual subcontracting plan for a contract to receive credit towards its small business subcontracting goals for subcontract awards made to small business concerns at any tier.”
You can see more details about the proposed rule at the Federal Register, where comments were collected until December 7, 2015.
Predictably, this rule is still in flux; it has so many potential dangers and pitfalls, as well as unintended consequences. The intent is to allow not only a direct subcontract to count towards the small business goals when awarded to a small business, but also for small businesses that subcontract to large businesses that subcontract to the Prime. Is that clear as mud? In other words, 3rd level (lower tier) small businesses would count towards the Prime’s small business goal.
Steven Koprince points out that SBA focused on not double counting. But that’s hardly the whole story. The 3rd tier subcontractor small business has no direct Prime relationship, and may even be completely out of sight and out of the CUSTOMER’s mind. So no “credit” (goodwill, relationships, work history) accrues towards later getting a direct small business Prime contract.
However, if this kind of extra credit means that more small business actual revenue occurs because somewhere in some tier of the working relationships, small businesses are working the job, that’s good. What I fear though is that BigBiz1 subs out to BigBiz2, and BigBiz2 gets to count its low level service support (like janitorial services) as subcontractors, getting small business credit for the Prime work. Unless the NAICS code for these subcontractors is the same as the Prime NAICS code, my feeling is this can easily become a sham.
This rule will require some detail before all the problems are worked out, so it may be a while. Watch this space for more details.
If you’ve had no interface with the military at all, you may not realize that it’s where you find the best and brightest that the nation has to offer. As a norm, most veterans are very dedicated to what they do, have a high level of integrity, and will always put in their best effort. They’re used to a good, identifiable chain of command or organizational structure, and like working in that type of environment.
Keep in mind that veterans may not know the nuances of business. There will be a learning curve. In the military, people are used to going after a task and breaking it down. Using a distinct decision making process, they find the best people for the job and direct them to execute.
Mission execution is what it’s all about; financial considerations don’t come into place.
On the civilian side, the veteran employee has to learn to consider costs, understand people’s set roles and responsibilities and who’s doing what; work around the logistics of moving someone from one role to another.
Making the transition as a veteran
As one of TAPE’s own employees tells us, veterans facing this transition need to make a plan, upfront and early. Put a lot of critical thought into it, and then execute your plan.
He suggests a self-assessment – where you are, and where you want to be. The bottom line. You have some choices you need to make. First, when you get out, are you going to follow the job (move), or do you want to stay where you are? That’s your first fork in the road.
From there you’ll have other choices depending on which route you take. Of course a lot of these choices will depend on your family, for example wanting to let your kids finish up high school in the same place before you would consider moving.
TAPE, like all government contractor firms, is very veteran-friendly. But over and above the obvious legal and HR issues, our experience is that veterans, even with the direct-from-service learning curve, are trained in a particular way, and respond to direction by just heading off and doing it.
By the way, a similar experience comes from direct-from-the-retirement-pool civilian employees of the Federal Government. Both of these pools are also likely to have that magic word, relationships. And that will be the key to success, to utilize the skill sets and maximize the relationships.
This is a guest post by Staci Redmon of SAMS.
Is the federal government moving away from Lowest Priced Technically Acceptable (LPTA) procurements? Contractors that are in the people business, like my company, can only hope so!
When I say “people” business, I mean providing the government with people who exceed expectations in delivering operations, technology and facilities management services. In LPTA procurements, competitions in which the government selects the lowest-priced proposal that meets a minimum set of technical requirements, contractors are not rewarded, or even encouraged, for exceeding these minimum standards. This approach is not compatible with a corporate philosophy that stresses excellence in service delivery by people who are best qualified to do the job.
On March 4, 2015, Mr. Frank Kendall, Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L), issued a memorandum detailing the role that LPTA procurements should play in the Department of Defense (DoD) acquisition process. According to the Kendall memorandum, use of LPTA is appropriate “only when there are well-defined requirements, the risk of unsuccessful contract performance is minimal, price is a significant factor in the source selection, and there is neither value, need, nor willingness to pay for higher performance.”
The Kendall memorandum states that LPTA has “a clear but limited place” in source selection. The memorandum warns that if LPTA is not used appropriately, DoD “can miss an opportunity to secure an innovative, cost-effective solution to meet Warfighter needs and to help maintain our technical advantage.”
I could not agree more. Yet we continue to see startling examples of LPTA being used in highly questionable circumstances. For example, we recently saw two LPTA procurements being solicited by a major military hospital in the Washington DC metro area for emergency room and oncology registered nurses (RNs).
What message does this send to our warfighters and their families who are going to the emergency room or who need cancer treatment? Would the acquisition specialist who wrote this procurement or the Contracting Officer who approved it want to be treated by lowest price, technically acceptable medical personnel? In this situation the risk of unsuccessful performance is certainly not minimal.
We have also seen another Defense agency, who is responsible for information superiority in defense of our nation, using LPTA to procure cybersecurity experts. These are professionals who must have the highest-level clearances for work that is mission-critical for the security of some of our nation’s most sensitive assets. It is another situation in which the LPTA approach clearly does not make sense.
The reality of LPTA procurements is that contractors are spending a lot of time and money to deliver high-quality technical proposals that may never be read. Here is how the process works in the real world of government acquisition:
Once all of the proposals are in, the government contracting officer opens the bids and looks at the price proposal only. He or she then puts the price proposals in order from lowest to highest price. The technical proposal of the lowest bidder is then opened and compared against a checklist of the solicitation’s technical requirements. If that lowest price proposal meets all of the requirements and it is considered technically acceptable, that contractor can be awarded the contract. The contracting officer does not even have to look at the other technical proposals.
Of course, this approach may be considered more efficient from the government’s standpoint. No need to put together full selection boards. Not as many meetings have to be held. But what about the contractors who make a good-faith effort to deliver a high-quality technical proposal??
For SAMS, I have made the executive decision that we will not submit bids when the evaluation factor is LPTA. We have no desire to get caught in the crossfire of price shootouts and the subsequent fallout of not meeting contractual performance standards that can result from the “race to the bottom” LPTA approach.
The LPTA method may work when the government is buying pens, toilet paper, or office supplies, but not when it comes to buying people and their skills. As Mr. Kendall affirmed in his memorandum, the LPTA approach should be used only when technical requirements are well defined. As is the case with many professional services procurements, requirements are very rarely well defined.
When the government is using LPTA, any proposal that exceeds the minimum is not rewarded. That makes it hard to motivate people who are committed to developing or delivering an excellent product or service. Moreover, if your company’s core value is people exceeding expectations, how do you convince employees that you care about them and their families when you are willing to gouge their salaries?
For companies in the people business, LPTA creates a death spiral. If your company is known for devaluing salaries, you cannot attract qualified people. You cannot motivate the people you do attract, because there is no incentive for them to perform at an exceptional level. Since there are no government rewards for exceeding expectations, employees cannot be rewarded. Ultimately, you cannot retain them.
A way forward?
If agencies actually implemented and followed the criteria in the Kendall memorandum, there is some potential for LPTA. The challenge is giving well-defined requirements and balancing the risk of unsuccessful performance. However the way the LPTA “game” is currently played, someone always has the potential to underbid. In many cases, this underbidding is unrealistic.
Because of this, the government needs to do a better job of determining fair market value. Unrealistically low prices should be declared non-responsive and thrown out of the competitive range. Otherwise, LPTA procurements could be putting the government, warfighters, and the public at risk.
In the long run, the government needs to do the necessary upfront work when acquisition staffers are working with the program office to determine contract requirements. This is the only way the government can clearly define technical requirements and, more importantly, delineate the standard of proof that bidders must show in order to be determined technically responsive.
The bottom line is that businesses these days have limited resources. These resources may be even more limited in small and medium-sized businesses. We cannot support the overhead cost to develop competitive proposals if we are expected to operate in a price shootout environment with little or no return. LPTA has its place in the federal government procurement cycle, let’s use it when it makes sense and not as a blanket procurement method for trying to reduce costs.
This post originally appeared on LinkedIn at https://www.linkedin.com/pulse/lpta-procurements-lets-lose-sight-p-people-staci-redmon-pmp-mba and was reprinted with permission.
Staci L. Redmon is President and CEO of Strategy and Management Services, Inc. (SAMS), an award-winning and leading provider of innovative operations, management and technology solutions in a variety of public and private sector industries and markets. SAMS is based in Springfield, VA.
Back on October 1, 2015, GSA launched its new Professional Services Schedule (PSS), which consolidates eight professional services contract schedules into one.
The eight schedules are:
#520 – Financial and Business Solutions (FABS)
#541 – Advertising and Integrated Marketing Services (AIMS)
#738II – Language Services
#871 – Professional Engineering Services (PES)
#874 – Mission Oriented Business Integrated Services (MOBIS)
#874V – Logistics Worldwide (LOGWORLD)
#899 – Environmental Services
#00CORP – Consolidated Services
This is important for everybody to understand because it means that the old MOBIS schedule that many of us had, the one that handles program management services, is now a part of this new schedule and has a lot more scope than before.
This creates a new opportunity for people who have a MOBIS schedule or one of these other schedules to now add all these different functions to their schedule and bid on more work.
In particular, there may be things that you didn’t feel like you were quite qualified for, but now all you have to do is add another SIN code (this is not any kind of moral judgment; it stands for Special Item Number) to your profile. GSA has detailed instructions for how to modify your information.
It’s very important to understand and follow GSA’s rules for how you stay on a schedule, because the whole reason for this change is that GSA is trying to reduce the number of vendors and the number of contracting staff they need, in order to hold their costs down.
As Tiffany Hixson writes on the GSA blog, “By reducing the number of contracts supporting the Professional Services category of spend, GSA will eliminate more than 700 contracts resulting in an estimated five year savings of $3.95 million, and sustained savings of $1.29 million annually thereafter.”
MOBIS was a big deal before, but this new combination of MOBIS with professional engineering and the other schedules makes it a really big deal. So as readers, you should really be up to date on what these schedules look like, what your obligations are to stay on GSA’s good list, and most importantly how to make use of this increased opportunity.