Finding a great Federal teaming partner is not easy, particularly from a pricing strategy perspective. In Federal procurements, you will often see teams assembled that look like a list from “who’s who” of Government contracting. They are familiar names. Their reputation for technical excellence shows up in the awards they call to their name. What we don’t see, is what happens behind the scenes while the proposal process is unfolding. It can be a dream or a nightmare.
Usually you see companies who make teaming partner decisions based on capabilities and what it takes to round out the team. Many of you are familiar with the great stories about how the teaming partners cooperated in preparing the technical solutions. The team won and everyone went on to work on a great project.
From a pricing strategy perspective, your teaming partners can make or break the proposal. With such greater emphasis on pricing these days, you might want to focus more on how great those teaming partners are going to play in the sandbox when it comes to developing the project’s winning pricing strategy.
Everyone has stories about their worst nightmare – the teaming partner doesn’t cooperate during the proposal process. They don’t want to work diligently with you on the technical proposal. Worse yet – they don’t cooperate with you on attaining a reasonable and competitive price. Imagine now you have to work with them!
The elements of great teaming partners from a pricing strategy perspective are the focus of what is presented here. Sometimes it takes sugar and sometimes it takes salt to work with your teaming partners on price. Most times, it takes a little of both and strong leadership on your part as the prime contractor.
There are at least three key elements that make for a successful attainment of pricing goals that will turn into a win for the entire team.
- Advance Pricing Discussions
Discuss your pricing strategy requirements in advance with your teaming partner. Do your homework first in determining what the customer’s budget really is. Know the customer budget. It is basic to knowing at a top level what you are aiming for. Know what your competitors are likely to price their solution for and engage your teammates in their knowledge of the competitors to get the best information you can about the competition. Get or perform an adequate competitive analysis based upon known competitive pricing factors. Complete your own internal company analysis homework in what it costs you as the prime to do business. Run the costs for this specific work requirement, and sharpen your own pencil with what it takes, in detail, to get to the winning price. Lastly, engage in pricing discussions and share all of this information with your signed teaming partners. It’s not unlike a black hat discussion that you hold up front with your signed teammates before you have the final RFP. Lastly, you as the prime, set the targets for your subcontractors. Give them hard targets to hit with the discussion you hold before the requirement is a reality. Make your teammates part of the price strategy solution. - Teammate Pricing Timeliness and Compliance
Expect and communicate that your teammates prepare pricing data according to your schedule and instructions. Amazing that this is even a consideration! To get your subcontractors to give you what you want and when you want it means you have to have a plan. You need to prepare an RFP for them; have a schedule for data calls, pricing strategy meetings (they agree to attend), request and expect subcontractor Representations and Certifications; and provide them with instructions and guidance for what you are requesting. It’s your responsibility as the prime contractor to communicate the need for your teammates’ cooperation for timely responses to your requests and compliance with your instructions. - Willingness to Move on Price or Staffing
Have your teaming agreements explicitly state that your teammates are willing to move on price if need be to make the bid a more competitive price. Once you make the above two requirements clear, this third step is essential to a winning and competitive price. You must get agreement that the primary decision maker about price is you, the prime. Teammates can sabotage the winning price solution by getting dug in or greedy about driving the price points. The teammate needs to be willing to be open to staffing changes as the pricing strategy and technical solution unfold – the best solution of both will win. If the teammate is not willing to change their prices or modify the staffing to reach the targets you have collectively set, then they also must be open leave the team. Put that specifically in your teaming agreement and stick to it. That’s a hard call to make when you need that teammate to make the technical solution a winning one. Getting agreement on their eagerness to move on price before you begin will save you in the last days when you are fine tuning your price to make it to your price to win.
Strategic Pricing® Perspectives
These important three points comes from client bad experiences. And yes, it is a nightmare when any one of these three is not part of your teaming discussions, agreements and actions. When you are the prime, you need to take the lead on pricing, give great guidance, and include your potential subcontractors in your pricing strategy. They also have an important role in winning. When you sharpen your pencil to get to the right price and they don’t, you lose. Make it a win with the right teaming approach on attaining the winning price.
For more about Federal teaming read this article
