An Efficient Price-To-Win Strategy
The federal government is overextending the federal budget to address the impact of COVID-19 on the economy and the health care system. This will inevitably lead to reduced budgets across the entire government for several years. With fewer government dollars, competition between Government Contractors will intensify. This competition will manifest itself in aggressive pricing such as low price technically acceptable (LPTA) type pricing, even for opportunities with trade off evaluation criteria. Understanding the competitive price range for opportunities will become ever more important. This understanding is obtained through price to win (PTW) analysis.
Traditional PTW analysis can take weeks and cost several thousand dollars. This is a good investment for large bids and/or strategic captures. The timing of this analysis tends to be between release of the draft government request for proposal (RFP) and the release of the final RFP. The closer to the final RFP, the less opportunity for contractors to make changes to their offering to be competitive while minimizing the amount of risk to achieve the PTW. The cost of traditional PTW analysis can also be prohibitive for mid-size contractors. Even large contractors only employ traditional PTW analysis on a select number of opportunities.
There is another approach.
Perform a PTW analysis after the qualification for pursuit up to the release of the draft RFP. Identifying the winning price range at this stage of a procurement allows solution architects to create the most competitive solutions with the least amount of risk. This is basically design to price (DTP). DTP is akin to design to cost (DTC) which introduces a cost target to the requirements of a design solution. DTP is a broader concept that encompasses the entire solution set.
EconPTW enables DTP. A minimal amount of information is required for an EconPTW analysis. The analysis can be performed in hours to obtain a competitive price range, rather than days or weeks. EconPTW is a proven analytics-based approach built around the economic theory of competition with a single customer and multiple suppliers.
DTP is a strategic edge for contractors to be one step ahead of their competition.