World Domination: The Art of Successful Capture Management

World Domination: The Art of Successful Capture Management
Bruce Morton, APMP Fellow President, 2 Oceans Consulting

Presenter Presenter Name Title Organization Phone Email Bruce Morton,
APMP Fellow President 2 Oceans Consulting (703) Bruce Morton May 16

World Domination: The Art of Successful Capture Management
Objective: dominate your business world Achieve and sustain a consistently high probability of win (Pw) High Win rate: (a) dollars bid & (b) quantity bid Industry average win rate is about 33% Domination win rate goal > 70% - 90% Recompete goal vs. Competitive goal Enterprise goal vs. Personal goal Bruce Morton May 16

Topics Capture Management Perspective Killer Win Strategy 
Win Themes on Steroids Costing & Pricing Strategy  Competitive Price Linked to Value Bruce Morton May 16

Why Do We Need A Win Strategy?
Far Side Cartoon Bruce Morton May 16 Bruce Morton May 15

A Capture Process Perspective (Notional)
Customer Receive Evaluate/ Acquisition Process RFI Industry Day DRFP RFP Proposals Award Decision & Milestones Company/Team Proposal Customer Pipeline Process Exploratory Interest Pursue Bid Submission Award Decision & Decision Gates Color Team Reviews Blue Team Black Hat Pink Team Red Team Business Development Exploratory Capture Management Proposal Management Post Award Source: Bruce Morton Bruce Morton May 2016 6

The Repetitive Bid Environment
Bidder: Your company/enterprise wins business from the federal government by repetitively Submitting a proposal in response to an RFP or Task Order Request Teaming with a prime who is submitting a proposal in response to an RFP or Task Order Request Consultant: Your company/enterprise wins business from Bidders by repetitively providing consulting or process services Bruce Morton May 16 7

Process Perspective Insanity is doing the same thing over & over again, expecting different results.* * Source: Albert Einstein Hope is NOT a Strategy * Source: Title of Book by Rick Page, 2002 The idea is to develop an effective and successful process, and use/replicate it over and over again.* * Source: Bruce Morton Bruce Morton May 16 8

Key: Processes + Tools + People
Business Development (incl. Pipeline Tool) Capture Management Proposal Management Milestone/Gate Reviews Experienced people to execute Somewhat of an art Is your process ISO 9001? Bruce Morton May 16

Resources Perspective
You don’t have enough resources (people; funding; etc.) to bid everything  You have to be selective View yourself as “opportunity rich” * The wisdom is in deciding what not to bid * Resource to win or don’t bid * * Source: Bruce Morton Bruce Morton May 16

Capture Training Perspective
Providing Capture Management Training is like teaching a novice how to play golf in a classroom, and then expecting them to then go out and play a really good game of golf * * Source: Doc Dougherty, Lockheed Martin In reality, a successful result is a combination of Training, Experience, and Mentoring Some companies now have a formal Capture Manager certification process (e.g. Lockheed Martin; Boeing; Raytheon) Bruce Morton May 16

Why Do We Need A Capture Process?
Consistently Achieve a High Probability of Win Utilize a Structured Process Repetitive and Successful Tailorable A Structured Process becomes more critical as an organization starts bidding Much larger opportunities New customer opportunities Bruce Morton May 16

Quick-Look Opportunity Assessment - The Three Questions
Is It Real? Can We Win? Do We Want To Win? Bruce Morton May 16

Differentiation vs. the 10-80-10 Model
Contractors strive to differentiate themselves BUT Customers think we’re all the same The Model: re Contractors Ref.: Roger Baker, Chief Strategy Officer, Agilex (formerly Veterans Affairs CIO) Ten percent: are worth fighting to keep because they deliver results and are focused on making the government customer successful Ten percent: you should fight to fire because they just don’t care about results 80 percent: it doesn’t matter who gets the work Bruce Morton May 16

Winning the Battle Baron Carl von Clausewitz (circa 1830) Bill Gates (circa 1986) Most large federal proposal opportunities are won or lost before the RFP is ever released Killer Strategy based on interaction/iteration with customer to validate capture strategy elements Clearly communicate a compelling value proposition with compelling teaming & win themes at acceptable risk and competitive price Bruce Morton May 16

Offer Elements Offer will typically consist of 2 elements in separate volumes Technical, Management, Schedule & Transition - Emphasis of most Capture Management training Costing & Pricing - Typically treated as highly proprietary process (both internally & externally) A successful Capture Strategy & the Process to achieve it will address both elements Clearly establish and communicate a compelling value proposition with compelling teaming and win themes at a competitive price Objective: Consistently Achieve a High Probability of Win Bruce Morton May 16 16

Capture Perspective: The Five C’s (Source: Bruce Morton)
Contract Opportunity Customer(s) Company/Teammates Cost/Price Competitors 17 Bruce Morton May 16

Wedge of Influence (Notional)
Customer Receive Evaluate/ Acquisition Process RFI Industry Day DRFP RFP Proposals Award Decision & Milestones Company/Team Proposal Customer Pipeline Process Exploratory Interest Pursue Bid Submission Award Decision & Decision Gates Color Team Reviews Blue Team Black Hat Pink Team Red Team Acquisition Process RFI Industry Day DRFP RFP Receive Proposals & Milestones Pipeline Process Exploratory Interest Pursue Bid Proposal Submission & Decision Gates Color Team Reviews Blue Team Black Hat Pink Team Red Team Window of Opportunity to Interface With & Influence Customer Source: Bruce Morton Bruce Morton May 16 18

Passing A Blue Baton to the Proposal Manager
The Capture Manager hands the baton to the Proposal Manager for execution Baton includes the win strategy, teaming & rationale, offer design, pricing strategy, etc. Expectation that subsequent adjustments will be made as required Typical Issues Incomplete hand-off (e.g. work not completed) Incomplete or no Capture Strategy Incomplete or no Pricing Strategy You can’t do a Blue Proposal unless you do a Blue Capture and transfer a Blue Baton * * Source: Bill Brigadier, Brigadier Consulting Bruce Morton May

The 3 C’s for Win Themes (Source: Bruce Morton)
Comprehensive Compelling/Convincing Compliant Bruce Morton May 16

Win Themes: Typical Issues and Pitfalls
Generic Generic Themes vs. Company/Team Specific Themes Generic Themes vs. Opportunity Specific Themes Generic Themes vs. Solution Specific Themes Comprehensive Themes focus on one topic vs. Themes focus on all key topics “Our Company” vs. “Our Team” Compelling “Me Too” vs. “Why Us?” “We” vs. “You”  Value Proposition Features vs. Benefits Proposal: Generic Captions vs. Action Captions Bruce Morton May 16

Generic vs. Company/Team Specific Themes
Generic Themes Bullets that most competitors will claim Reused Filler & Boilerplate Opportunity Specific Themes Unique to your company and/or team Specifically created for this opportunity Litmus Test: Substitute another company’s name in your win themes and see if anyone realizes the difference Bruce Morton May 16

Generic vs. Opportunity Specific Themes - 1
Your Generic Win Theme Customer Reaction We read the RFP You can read! We all learned to in 3rd grade. We understand what we read OK. You’re capable of understanding what we wrote. So …? We agree with the customer mission That’s nice, but you really have no choice. Would you actually disagree? We want to work with you Well, that’s good I guess We have a Team And this benefits me how? We have a Program Manager Well, you know you need one! We have an experienced Program Mgr. Is the experience specifically relevant to this program? We have a Management Process Anything special or proven about it? We can do this Based on what? Any past performance or other evidence? We have an approach So what is it, and what successful experience is it based on? Bruce Morton May 16

Generic vs. Opportunity Specific Themes – 2
Example of Opportunity Specific Theme: Proposed Program Manager has successful relevant experience with customer & with industry Dr. Andrea Brady will serve as Program Manager, reporting directly to Ms. Susan Thomas, Operations VP Dr. Brady has 17 years experience with NASA, and after joining industry has successfully managed NASA and other spacecraft programs of similar size, scope, and complexity, helping to assure low risk and a high probability of success on the proposed program Bruce Morton May 16

Generic vs. Solution Specific Themes - 1
Generic Theme: Vague references to solution capability without actually offering a specific approach or solution Opportunity Specific Theme: Proposing a specific technical and management approach (backed up by successful past performance) Litmus Test: Are you offering a specific approach or solution or just talking around it? Bruce Morton May 16

Customer Loss Debriefings - Examples
“The Offeror appears to understand the Program, but the lack of specificity made it difficult to evaluate and fully assess the viability of their proposed solution.” “The Offeror’s proposed price reflects multiple omissions in their proposal and a relatively low number of bid labor hours. The labor mix for Task Orders is not realistic (i.e. too low).” “The Offeror’s proposed price is too high (vs. competitors) to justify the best value benefits that were proposed” Bruce Morton May 16

Themes focus on one topic vs. focus on all key topics
Develop and list win themes by key topics Technical Management Schedule Transition/Phase-In/Start-up Best Value Past Performance Risk etc. Develop win themes for each topic to help organize thoughts and avoid skipping tough topics Also list Potential/Desirable Win Themes in blue font Convert to Win Theme bullets and word-smith on PowerPoint charts Bruce Morton May 16

“Our Company” vs. “Our Team”
Why Team if you’re a prime? Opportunity Specific Teammate helps fill out the weaknesses/holes/gaps in the Requirements vs. Capabilities matrix (meatball chart) Teammate is incumbent (prime or sub), brings customer experience, brings customer intimacy, has a desirable facility location, has a presence at the customer site; and/or etc. Teammate is a certified Small Business; Veteran Owned; Service Disabled Veteran Owned, Woman Owned; HUBZone; and also meets one of the above criteria Business & Other Considerations – Examples Quid Pro Quo We like the company/have worked with them before/they do good work/mentor protégé, etc. So refer to “Our Team” vs. “Our Company” throughout the proposal 2014 Mid-Atlantic Conference & Expo Bruce Morton May 16

“Me Too” vs. “Why Us?” – 1 Answer the question: “Why Us?” vs. “Me Too”
Value Proposition: What is the benefit of us from the customer(s) point of view? What is our proposed approach/solution? Technical; Management; Schedule; Transition/Phase-in/Start-up; Performance; Best Value; Risk; Etc. Do our teammates fill out the weaknesses/holes/gaps in our Requirements vs. Capabilities matrix (meatball chart)? What is the compelling evidence that supports that we and our team can successfully do/perform what we say? what we say at low or acceptable risk? Bruce Morton May 16

“Me Too” vs. “Why Us?” – 2 The Death Strategy for a re-compete:
“The customer doesn’t like the incumbent so we will win!” Actually, if this is really true, then one of the competitors will likely win, but not necessarily you!!! Best to assume that the customer does like the incumbent, and then explain why you should win Still need to answer “Why Us’ vs. “Me Too” Bruce Morton May 16

“We” vs. “You”  Value Proposition
What is the benefit from the customer(s) point of view? Change perspective from “we” to “you”: Poor: We will achieve a significant improvement in customer satisfaction Good: You will see a 30% improvement in customer satisfaction within 9 months as measured by 3rd party customer surveys Poor: We are providing a 3 Terabyte hard disk drive Good: You will have the highest capacity COTS hard disk drive available today Bruce Morton May 16

Features vs. Benefits Feature: We are providing a 3 Terabyte hard disk drive Implication: Isn’t that great? Problem: Leaves it up to the reader to decide significance Benefit: You will have the highest capacity hard disk drive available today: 3 Terabyte COTS (Commercial-Off-The-Shelf) Meets all requirements Cost effective Available now: low schedule risk and low technical risk Bruce Morton May 16

Win Themes: Review Techniques - 1 Source: Bruce Morton
Cross Out Bullets Put Win Theme bullets on PowerPoint chart Cross out all generic strategy bullets Cross out all bullets that most competitors will claim See what’s left (may not be much) Review/discuss and figure out how to mitigate Bruce Morton May 16

2. Typical Issues & Pitfalls Carefully and critically evaluate Win Themes against each bullet of “Win Themes - Typical Issues & Pitfalls” Generic Generic Themes vs. Company/Team Specific Themes Generic Themes vs. Opportunity Specific Themes Generic Themes vs. Solution Specific Themes Comprehensive Themes focus on one topic vs. Themes focus on all key topics “Our Company” vs. “Our Team” Compelling “Me Too” vs. “Why Us?” “We” vs. “You”  Value Proposition Features vs. Benefits Identify and Mitigate any issues Bruce Morton May 16

3. Create Loss Debriefing Create a customer debriefing for the loss Use prior loss debriefings as a source Example - Best Value: lost because cost differential (vs. the winner) was too high Identify and Mitigate any issues Bruce Morton May 16

Customer Loss Debriefings - Examples
“The Offeror appears to understand the Program, but the lack of specificity made it difficult to evaluate and fully assess the viability of their proposed solution.” “The Offeror’s proposed price reflects multiple omissions in their proposal and a relatively low number of bid labor hours. The labor mix for Task Orders is not realistic (i.e. too low).” “The Offeror’s proposed price is too high (vs. competitors) to justify the best value benefits that were proposed” Bruce Morton May 16

Generic Caption vs. Action Caption - 1
In your proposal, the captions should convey the key elements of your story independent of the text Some customer evaluators are better at reading and comprehending graphics & captions Some customer evaluators are better at reading and comprehending text Customer evaluators can read their assigned proposal section, then refer back and copy the captions as justification to support their evaluation score Bruce Morton May 16

Fig. 1-2: Pie Chart Bruce Morton May 16

Fig. 1-3: Horse 40 Bruce Morton May 16

Costing and Pricing are Different
Strategy/Approach: Need to Strategize both Cost and Price Cost: Expenses Incurred by Contractor labor (no. of personnel; skill levels; butts-in-seats; ...); materials, facilities, risk (redesign; spares; retest; …); etc. Select cost center; make labor source decisions; perform risk assessment; etc. Price: Amount Charged to Customer Bruce Morton May 16

Price: Amount Charged to Customer
Considering cost, profit, risk, Pw, business considerations, etc. Examples e.g. New Car - Discounts e.g. Machinists - Idle e.g. Golden Gate Bridge - Cables e.g. NASA – Photos Bruce Morton May 16

Who is your pricing strategist?
Pricing Must Address One or More Potential Aspects of Evaluation Criteria Evaluation Criteria may include: Affordability Cost Realism Best Value VATEP (Value Adjusted Total Evaluated Price) LPTA (Low Price, Technically Acceptable) Total Cost of Ownership CAIV (Cost As An Independent Variable) Etc. Who is your pricing strategist? Bruce Morton May 16

Pricing Tools and Techniques
PTW (Price-To-Win) ICE (Independent Cost Estimate) Should Cost (Will Cost - Cost Initiatives) Design to Cost CAIV (cost as an independent variable) Best Value VATEP (Value Adjusted Total Evaluated Price) Assumptions Analysis & Verification Risk & Risk Mitigation - Customer perceived Risk & Risk Mitigation - Company perceived Bruce Morton May 16 45

Costing & Pricing Considerations - 1
Activities Performed Independent of Capture Team (performed by others in your company or a consultant) Price-To-Win/ Position-to-Win Includes Competitor Cost Analysis Independent Cost Estimate (ICE) Risk & Risk Mitigation - Company perceived Activities Performed by the Capture Team Receive Independent inputs and address/evaluate Request iterations as necessary Develop approach/rationalization/mitigation Include inputs & recommendations in Management Reviews Bruce Morton May 16

Costing & Pricing Considerations - 2
Additional Activities Performed by the Capture Team Risk & Risk Mitigation - Customer perceived Costing & Pricing Strategy  Pricing Strategist Selection and/or creation of appropriate cost centers Strategizing cost inputs from teammates/subs Assure/Enforce consistent level of assumed risk across estimating elements Baseline/Solution Development BoE/BoM (Basis of Estimate/Bill of Material) Development & substantiation Planned Investment (prior to award and/or after award) 47 Bruce Morton May 16

Risk & Risk Mitigation - Company Perceived
Is It Real? Can We Win? Do We Want To Win? Bruce Morton May 16

No escalation/forward pricing allowed for inflation
Do We Want To Win? Terms and Conditions No escalation/forward pricing allowed for inflation Winning contractor will be paid in foreign currency, but co. will pay workers and teammates in U.S. dollars  currency speculation Offset requirement is a large percent of the bid value Legal liability (e.g. early DHS) Perspective of Bidding unit vs. corporate Bidding unit makes its dollar goals but bid is risky and could sink the corporation Bid causes a potential OCI for a much larger bid 49

Risk & Risk Mitigation - Customer Perceived
Understanding of and approach to technical requirements Management Schedule Transition or start-up or phase-in risk Ability to staff surge requirements Omissions and errors in cost analysis Salaries and/or benefits seem too low to be competitive Bidder has no local presence in the specific locale Weak relevant past performance Etc. Overall Risk and Risk Mitigation Score 50

VATEP (Value Adjusted Total Evaluated Price)
DoD Source Selection Procedures Issued 3/31/16 Effective on source selection plans approved after 5/1/16 Defines minimum (threshold) requirements & encourages bidders to achieve higher (objective) performance levels Provides a defined price evaluation credit for bidders who can achieve these higher desired performance results This evaluation methodology provides more specificity to best value tradeoffs and quantifies how much DoD is willing to pay for bidders exceeding solicitation minimum requirements 51 Competitive Price Linked to Value 51

Independent Cost Estimate (ICE)
Perform ICE analysis as part of Capture Management Process Present ICE results to Capture Manager and team Capture Manager includes and discusses ICE as part of Management Review ICE is a Discipline Comparison This opportunity is about 80% as complex as XYZ program, which we just completed Cost of XYZ Program was $285 Million Baseline metrics X hours to write each line of code Typically 15% spares for assembly Typically 10% retest for qualification test Typically 5% production discards Bruce Morton May 16

Price-To-Win (PTW) What Is Price to Win? A Marketing Number
PTW Objective Bid highest price possible and still win What is Not Price to Win? Internal Pricing Cost Build Up Model Fee Strategy Source: Bill Brigadier, Brigadier Consulting Bruce Morton May 16

PTW “Bid Bar” $100M Customer Announced Budget or Cost Est.
Source: Bill Brigadier, Brigadier Consulting Inc. (BCI) $100M Customer Announced Budget or Cost Est. Customer Buying Habits Lowest Credible Bid $95M Bid Bar $80M Our initial bid bound - $80M - $95M Adjust for Competition Assessment Source: Bill Brigadier, Brigadier Consulting Inc. (BCI) Bruce Morton May 16

Questions Bruce Morton May 16

Thank You Presenter Name Title Organization Phone Email Bruce Morton,
APMP Fellow President 2 Oceans Consulting (703) Bruce Morton May 16

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