Risks and Opportunity Components of a Bid Strategy - Assignment Example

? Assignment 2: Bid Strategy The federal procurement opportunity’s mission is to ensure that federal acquisition process leads to the best results and is of value to the taxpayer. All these activities are carried out by the Office of Federal Procurement Policy (OFPP) which also plays a very big role in formulating policies to be used in the federal procurement system. Therefore as part of its mission, the federal procurement opportunity ensures that delivery of better goods and services, serving its partners and expanding opportunities for small businesses. (Aaker, 2001, p. 78) Therefore in line with the federal procurement opportunity’s mission, a future action plan will involve acquiring more resources so as to recruit more skilled employees to carry out federal contracts and also ensure delivery of better services to our clients. Another plan is to strategize on how to have a competitive edge over our competitors. This can be achieved by ensuring we offer high quality services and coming up with new innovations in order to enhance better service delivery. Also in order to ensure opportunities are expanded, the employees need better compensation so as to feel motivated hence work harder toward our planned expansion plans in order to be able to handle more federal contracts. (Aaker, 2001, p. 123) One important way to make an assessment on a bid criteria is to score each relevant area. This will help in decision making on whether to abandon the bid opportunity or to identify actions that will help in improving the rating in order to meet the required threshold. In general, the bid evaluation form helps an organization to collect, organize and use the information to make informed decisions. The figure below show a bid evaluation form for our chosen firm. (Osborne, 2011, p. 201) A Bid Evaluation Form BID AREA BID AREA SCORING CRTIERIA Negative Neutral Positive RATING 1 2 3 4 5 6 7 8 9 10 Background Opportunity Unfamiliar with customer needs; cannot meet requirements Generally understand customer and may meet many requirements Fully understand customer and is able to completely meet requirements 6 Customer Reputation Poor past performance. Problems exist with the customer Neutral or no past performance Relationship neither positive nor negative Good past performance and strong customer relationship 8 Technical Ability Not qualified to perform any action Has the ability to perform technically Technically superior and has unique capability 8 Subcontractors Subcontractors detracting Subcontractors have no impact Subcontractors substantially enhancing 8 Marketing Intelligence Surprised by the RFP. Little contact with the customer Generally has a little idea of what is going on Inside track. Has excellent knowledge 8 Personnel/Proposal Resources Sufficient personnel and resources not available to support the proposal Sufficient resources available but need to be supplemented The best and brightest are available 6 Competition Competitor has an insignificant advantage None has an advantage Superior positioning Have significant advantage 7 Pricing Must cut corners in order to remain competitive Price credibility problems Responsive and generally competitive Have pricing advantage and with known limits 8 TOTAL SCORE: 59 AVERAGE SCORE: Total Points Divided by Number of Bid Areas 7.375 Comments: The average score from the bid evaluation is 7.375. This means the company is generally doing well in most bid areas but has not yet exhausted all the most available opportunities in order to improve the score. This result will help in comparing the overall score with the ultimate outcome of the bid. Developing a Bid Strategy The customer key evaluation requirements (CKERs) categories to be considered in this case include technical performance, management aspects, logistics applied, schedule, risks and associated costs. Based on the evaluation results from the bid evaluation form, it is clear that a technically compliant approach is required while offering attractive prices in our bid forms that will be too good to refuse by the procurement committees. Therefore after a review of every element and all our aspects of operation, cost reduction is the most important aspect that will enable us have a competitive edge over our competitors. An immediate attention is also required on major cost drivers and coming up with ways in which these costs can be minimized i.e. personnel costs which mostly accounts for over 50% of our past bid costs. Therefore, our main strategy will revolve around low price but with both marginal ad technical compliance. Therefore risks have to be taken in choosing less expensive solutions and ensuring that every action taken is based on providing the lowest-cost solution that will enable us to meet the program requirements. (Franklin, 2006, p. 183) Another possible strategy is the best value strategy. In as much us we may want to lower our costs in order to have a competitive edge over our competitors, the cost structure may sometimes be the lowest bidder. Therefore, with the best value strategy, we will be able to convince our clients that the value of our services and solutions is worth the higher costs. The best value strategy will require that we convince our clients that our approach is the best, based on performance, risk assessment, lowest life cycle cost, easy to maintain and has long-term supportability. (Fine, 2009, p.89) The main task here is to convince our customers not to worry about our approach which is based on low risks and the customer will not be required to divert attention from the core business of having his or her maintaince services completed. Finally, our company is small company (about one-tenth of our competitors) hence being smaller will be an added advantage. This is because we will be easy to work with, we can be a good subcontractor and we have the ability to follow lead of our customer. These three-fold strategy will be very instrumental in winning future federal contracts if implemented successfully. (Lewis, 2012, p.148) Risks and Opportunity components of a Bid Strategy Every bid comes with a set of potential risks and opportunities and these can arise from either by performing the contract in its terms and conditions or from the bid strategy themselves. An example of a risk is the availability of a penalties. Assuming the availability is a function of the number of maintenance personnel, decreasing either people or material reduces bid cost but decreases availability. Therefore, with all the employees aware of these, an opportunity here will be to ensure that any penalties are avoided hence raising the credibility of the company and chance of winning future contracts. Another risk associated with these inability to finish the awarded contacts in time because of the company’s size. This may at times happen in any case the company is awarded many contracts at the same time. An opportunity in this case is to either employ more staff or subcontracts to another smaller companies so as to ensure that the contrast is completed successfully. Finally another risk that may arise out of the bid strategy is inability to be awarded large contracts because of our size. However, this is the best opportunity to convince our clients that our small size is of advantage to us since it will ensure follow up to the customer hence efficiency is service delivery. (Osborne, 2011, p.139). References Aaker, D. A. (2001). Developing business strategies, sixth edition (6th ed.). New York: John Wiley & Sons. Fine, L. G. (2009). The SWOT analysis: using your strength to overcome weaknesses, using opportunities to overcome threats. S.l.: Kick It. Franklin, M. (2006). Performance Gap Analysis Tips, Tools, and Intelligence for Trainers. Alexandria: American Society for Training & Development. Lewis, H. (2012). Bids, tenders and proposals winning business through best practice (4th ed.). Philadelphia, Pa.: Kogan Page. Osborne, S. R. (2011). Winning government business gaining the competitive advantage with effective proposals (2nd ed.). Vienna, VA: Management Concepts. Read More