Blog Series: Customer Communications' Impact on Contract Awards (Blog 1)Sep 08, 2022
Guest Post by Mitch Reed, DBA, CPP, Fellow APMP
Dr. Mitch Reed set out to answer this question:
Does the customer/contractor relationship prior to solicitation [RFP] release impact the award decision?
The response to this question matters to Business Development (BD) professionals as they explore ways to impact the award decision. Below are his findings.
I have had the opportunity to work with many Business Development (BD) managers representing multiple government contractors over the past 30+ years. During this time, I have observed that most BD managers identify and pursue contact opportunities using one of two primary approaches:
- Identify Request for Proposals (RFPs) that match the company's capabilities using tools such as SAM.gov. This approach involves no or minimal contact with the potential government customers.
- Actively meet with the Program Management Office (PMO) or Contracting Officer (CO) in pursuit of a targeted program to influence the program requirements and budget where possible by making recommendations to improve the program's performance before the RFP's release.
The level of active engagement largely depends on the maturity of the BD managers and company management; however, it is not difficult to determine which approach is generally more successful. This is not to say the first approach cannot be successful in specific government markets, such as when competing for Lowest Price Technically Acceptable (LPTA) contracts. For Best Value Trade Off contracts, however, the second approach is the most successful. The customer/contractor relationship may significantly impact the contractor's proposed solution pricing approach, even for LPTA contract opportunities.
While many intuitively understand the importance of engaging with customers prior to RFP release, there was little-to-no research to support this approach or to identify which communication strategies had the greatest impact on the customer -- until now.
To move beyond anecdotal experience, I gathered data on 25 Best Value contract opportunities where the contractor submitted a proposal and the government issued an award (or loss) decision. I used a structured approach to interview 16 people from nine separate contractors (three large and six small businesses) and reviewed customer debriefing reviews from all 25 contract opportunities. The data collected determined the 1) communications activities used by the contractors, 2) frequency of these activities, and 3) level of past contractor/customer relationships (past performance) contractor, as well as 4) an evaluation of the contractor’s indirect relationship with the targeted customers.
Before we discuss the findings, it’s important to understand the main variables associated with this research. There are two categories of variables: variables that characterize how a contractor thinks about the customer, and variables that characterize how a customer thinks about a contractor.
Does the customer/contractor relationship prior to solicitation [RFP] release impact the award decision? My research found, yes, it does – when certain circumstances apply. Below are the four key findings that BD managers must understand and take into account for constructive capture planning.
- Contractors who actively communicated with their customers to develop customer Perceived Trust and Perceived Commitment and who Position themselves for upcoming contract opportunities prior to solicitation release showed a statistically significant, positive impact on the award decision.
- Perceived Trust and Perceived Commitment in the absence of Communications Interchange showed a statistically significant, negative impact on the award decision. In other words, Perceived Trust and Perceived Commitment on their own (without active discussions) were not enough to generate a positive impact on the award decision. The next blog on effective communication planning will delve into more detail on this phenomena.
- Reputational Trust (Customer's Technical/Management Proposal Rating) was a reliable predictor of the awardee. However, the Award Decision indicated that the customer contract awards decreased as the overall proposal rating increased. You read that right. Contractors scoring higher in Technical and Management were awarded fewer contracts. This was attributed to contractors with higher scores frequently being priced higher.
- Reputational Performance Satisfaction (Customer's Past Performance Proposal Rating) was not a reliable predictor of the contract awardee. For instance, at the proposal evaluation stage, while fully compliant, past performance appeared to become just a “checklist item.” We dive more into this result in the blog on pre-proposal planning.
This blog kicked off asking, does the customer/contractor relationship impact the award decision prior to solicitation release?
The answer is, yes for contractors who engage in active discussions to develop customer Perceived Trust and Perceived Commitment. Those who engage in this exchange position themselves for upcoming contract opportunities prior to solicitation release, indicating a trend showing a statistically significant, positive impact on the Award Decision.
We will continue to dig deeper into these implications over the next two blogs. The next blog will discuss creating an effective Communications Plan, including what elements are critical to ensure customer communication that provides results and develops trust with the potential customer. The final blog will address Pre-Proposal Planning and explore communication plans that create solutions and guide Price-to-Win strategies that positions the contractors for an Award Decision.
Trident Proposal Management is hosting a Webinar Q&A session with Dr. Reed on Wednesday, Sept. 28 at 7:30 p.m. EDT. This will be an opportunity for Dr. Reed to answer your capture-based questions. If you would like to submit questions in advance, email us at [email protected] and we'll add them to our list.
Dr. Mitch Reed, DBA, is a seasoned capture and proposal expert who brings more than 30 years of experience supporting business and proposal development. Dr. Reed recently completed his doctorate dissertation on Assessing the Business-to-Government/Contractor Relationship and the pre-solicitation relationship impact on award decisions. He has condensed his dissertation into a three-part blog series that presents his findings on communications’ impact on contract awards, and how to apply those findings to support proactive, effective communications and pre-proposal planning. This blog is part one of a three-part blog series. We’d like to thank Dr. Reed for his contribution to contracting research and providing us with information to share with the contracting community. If this blog seemed overwhelming, then today is a great opportunity to reach out to the Subject Matter Experts here at Trident Proposal Management. We can help you take the first steps (or recompete steps) in your upcoming proposal.
Reed, Mitchell Lee, "Assessing B2G Customer/Contractor Relationships Using Social Exchange Theory During the Search and Selection Stage." Dissertation, Georgia State University, 2022. doi: https://doi.org/10.57709/29846956