Project Management Ch.3

Proposed solutions

Bid or not to bid decisions

Competition.
Risk
conflict or consistency of mission
extension of capabilities
reputation
customer funds
availability of resources

Developing a winning proposal

A proposal is a selling document; it is not a technical report. And the proposal the contractor must convince a customer that the contractor;
understands what the customer needs
can carry out the proposed project
will provide the greatest bayou to the customer
is the best contractor to solve the problem
will capitalize on its successful experience with previous related projects
will do the work professionally
will achieve the intended results
will complete the project within budget and on schedule
will satisfy the customer

Proposal contents

Technical
Management
cost

Technical section

The objective of the technical section of the contractor proposal is to convince the customer that the contractor understands the need or problem and can provide the least risky and most beneficial solution. The technical section should contain the following elements;
understanding of the problem
proposed approach or solution
benefits to the customer

Management section

The objective of the Management section of the contractor proposal is to convince the customer that the contractor can be the proposed work and achieve the intended results. The Management section should contain the following elements;
description of work tasks
deliverables
Project schedule
Project Organization
related experience
equipment and facilities

Cost section

The objective of the cost section of the contractor proposal is to convince the customer that the contractor's price for the proposed project is realistic and reasonable. The cost section usually consists of tabulations of the contractors estimated costs of elements such as the following;
labor
materials
subcontractors and consultants
equipment and facilities rental
travel
documentation
ever had
escalation if needed
contingency
fee or profit

Pricing considerations

When contractors prepare proposal, they are generally competing with other contractors to a contract. The contractor must consider the following items on determining the price for the proposed project;
reliability of the cost estimates
risk
value of the project to the contractor
customers budget
competition

Customer a violation of proposals

Some of the criteria that might be used by customers in evaluating contractor proposals include the following;
compliance with the customer statement of work and requirements in the request for proposal
contractors understanding of the customer's problem or need
soundness and practicality of the contractor's proposed approach to solving the problem
contractors experience and success with similar projects
the experience of key individuals will be assigned to work on the project
management capability, including the contractor's ability to plan and control project to ensure that the workscope is completed within budget and on schedule
realism of the contractor schedule
Price

Types of contracts

Fixed-price contracts -- customer and contractor agree on a price for the proposed work
cost reimbursement contracts -- customer agrees to pay the contractor for all actual costs, regardless of amount, some agreed-upon profit

Contract provisions

The following are some miscellaneous provisions that may be included in project contracts;
misrepresentation of costs
notice of cost overruns or schedule delays
approval of subcontractors
customer furnished equipment or information
patents
disclosure of proprietary information
international considerations
termination conditions
terms of payment
though Ness/penalty payments
changes

Critical success factors

Pre-RFP/proposal efforts are crucial to establishing the foundations for eventually winning a contract from the customer.
Do not wait until formal RFP solicitations are announced by customers before starting to develop proposals. Rather, develop relationships with potential customers long before they prepare their RFPs.
Working closely with a potential customer puts a contractor and a better position to be selected as the winning contractor. Learn as much as possible about the customer's needs, problems, and decision-making process during the pre-RFP/proposal marketing.
Becoming familiar with the customer's needs, requirements, and expectations will help in preparing a more clearly focused proposal.
Be realistic about the ability to prepare a quality proposal and about the probability of winning the contract. It is not enough to just prepare proposal: rather, the proposal must be of sufficient quality to have a chance of winning.
A proposal is a selling document, not a technical report. It should be written in a simple, concise manner and should use terminology with which the customer is familiar.
In a proposal, it is important to highlight the unique factors that differentiate it from the competitor's proposals.
Proposals must be realistic. Proposals that promise too much or are overly optimistic maybe unbelievable to customers, and raise doubt about whether the contractor understands what needs to be done or how to do it.
When bidding on a fixed-price project, the contractor must develop accurate and complete cost estimates, and include sufficient contingency costs.

Summary

The development of proposed solutions by interested contractors or by the customer's internal project team is the second phase of the project lifecycle. This day starts when the RFP becomes available at the conclusion of the needs identification phase and ends when an agreement is reached with the person, organization, or contractor selected to implement the proposed solution.

Contractor should develop relationships with potential customers long before they prepare request for proposal. Contractor should maintain frequent contacts with past and current customers and initiate contacts with potential customers. During these contacts, contractor should help customers identify areas in which the customers might benefit from the implementation of projects that address needs, problems, or opportunities.These pre-RFP/proposal efforts are crucial to establishing the foundations for eventually winning a contract from the customer.

Because the development and preparation of a proposal takes time and money, contractors interested in submitting a proposal in response to on RFP must be realistic about the probability of being selected as the winning contractor. Evaluating whether to go forward with the preparation of a proposal is sometimes referred as the bid/no-bid decision. Some factors that a contractor might consider in making a bid/no-bid decision by the competition, the risk, its business mission, the ability to and its capabilities, its reputation with the customer, the availability of customer funds, and the availability of resources for the proposal in the project.

It is important to remember that the proposal process competitive and that the proposal is a selling document that should be written in a simple, concise manner. And the proposal the contract must highlight the unique factors that differentiate it from competitive in contractors. The contractor proposal must also emphasize the benefits to the customer if the customer selects the contractor to perform the project. The customer will select the contractor that it expects will provide the best value.

Proposals are often organized into three sections: technical, management, and cost. The objective of the technical section of the contractor proposal is to convince the customer that the contractor understands the need or problem and can provide the least risk he and most beneficial solution. The technical section should show an understanding of the problem, a proposed approach or solution, and the benefits to the customer. The objective of the management section of the contractor proposal is to convince the customer that the contractor can do the proposed work and achieve the intended results. The management section should contain a description of work past, a list of deliverables, a project schedule, a description of the organization of the project, a synopsis of related experience, and a list of any special equipment and facilities the contractor has. The objective of the cost section of the contractor proposal is to convince the customer that the contractor's price for the proposed project is realistic and reasonable. The call action usually consists of tabulations of the contractors estimated costs of such elements as labor, materials, subcontractors and consultants, equipment and facility rentals, travel, documentation, overhead, escalation, contingency, and a fee or profit.

When contractors prepare proposals, they are generally competing with other contractors to win a contract. Therefore, they must consider the reliability of the cost estimates, the risk, the value of the project to the contractor, the customer's budget, and the competition when determining the price for the proposed project.

Customers evaluate contractor's proposals in many different ways. Sometimes the technical and management proposals are evaluated first, without consideration of cost. This proposals with the highest point on the technical and management review are then evaluated for their costs. The customer weighs the technical and management merit against the cost to determine which proposal offers the best value. Some of the criteria that might be used by customers and to buy you a contractor proposals include compliance with the customer statement of work, the contractor's understanding of the customer's problem or need, the soundness and practicality of the contractor's proposed solution of the project, the contractor's experience and success or projects, the experience of key individuals to be assigned to work on the project, the contractor's ability to plan and control the project, the realism of the contractor schedule, and the price.

What's the customer has selected the winning contractor, the contractor is informed that it is the winner, subject to successful negotiation of a contract. A contract is an agreement between the contractor, who agrees to provide a product or service, and the customer, who agrees to pay the contractor a certain amount in return.

They're basically two types of contracts: fixed-price and cost reimbursement. In a fixed-price contract, the customer and the contractor agree on a price for the proposed work. The price remains fixed unless the customer and contractor agree on changes. This type of contract provides low risk for the customer at high risk for the contractor. In a cost reimbursement contract, the customer agrees to pay the contractor for all actual costs, regardless of amount, plus some agreed-upon profit. The type of content provides high risk for the customer, because contractor costs can overrun the proposed price, and low risk to the contractor.

A contract may include miscellaneous provisions covering misapplication of costs, notice of cost overruns or schedule delays, approvals for any subcontractors, customer furnished equipment or information, patent ownership, disclosure of proprietary information, international considerations, termination, terms of payment, notices or penalties, and procedures for making changes.