CH03 Developing Project Proposals

A contractor might consider the following in deciding to develop a proposal:

1. Competition 2. Risk 3. Mission 4. Extension of capabilities 5. Reputation 6. Customer funds 7. Proposal resources 8. Project resources

Elements of the management section

1. Description of major tasks 2. Deliverables 3. Project schedule 4. Project organization 5. Related experience 6. Equipment and facilities

Elements of the cost section

1. Labor 2. Materials 3. Equipment 4. Facilities 5. Subcontractors and consultants 6. Travel 7. Documentation 8 Overhead 9. Escalation 10. Reserve 11. Profit

Contract terms and conditions:

1. Misrepresentation of costs 2. Notice of cost overruns or schedule delays 3. Approval of subcontractor 4. Customer furnished equipment of information 5. Patents 6. Disclosure of proprietary information 7. International considerations 8. Termination 9. Terms of payments 10. Bonus/penalty payments 11. Changes

Project pricing considerations

1. Reliability of the cost estimates 2. Risk 3. Value of the project to the contractor 4. Customer's budget 5. Competition

Simplified Project Proposal

1. Statement of the customer's need 2. Assumptions 3. Project scope 4. Deliverables 5. Resources 6. Schedule 7. Price 8. Risks 9. Expected benefits

Elements of the technical section

1. Understanding the need 2. Proposed approach or solution 3. Benefits to the customer

In the proposal, the contractor must convince the customer that the contractor:

1. Understands what the customer is looking for 2. Can carry out the proposed project 3. Will provide the greatest value 4. Is the best contractor to address the need 5. Will capitalize on its successful experience with previous, related projects 6. Will do the work professionally 7. Will achieve the intended results 8. Will complete the project within budget and on schedule 9. Will satisfy the customer

Best and Final Offer (BAFO)

A final price for a project, submitted by a contractor at the request of a customer who is considering proposals from several contractors for the same project.

The proposal schedule must:

Allow time for review and approval by management within the contractor's organization.

Contract

An agreement between the contractor, who agrees to perform the project and provide a product or service, and the customer who agrees to pay the contractor a certain amount in return.

Management or Contingency Reserve

An amount the contractor may want to include to cover unexpected situations that may come up during the project.

Bid/No-Bid Decision

An evaluation by a contractor of whether to go forward with the preparation of a proposal in response to a customer's request for proposal.

The proposal process is:

Competitive

Proposal Manager

Coordinates the efforts of the proposal team to ensure that a consistent, comprehensive proposal is prepared by the due date stated in RFP.

A contractor's pre-RFP/proposal efforts are:

Crucial to establishing the foundation for eventually winning a contract from the customer.

Establishing and building trust is key to:

Developing effective and successful relationships with clients and partners

Relationships

Establish the foundation for successful funding and contract opportunities.

First impressions

Important to developing a continuing and fruitful relationship with clients

Examples of indirect costs

Insurance, depreciation, accounting, general management, marketing, and human resources

During the pre-RFP proposal activity, the contractor should

Learn as much as possible about the customer's needs, problems, and decision-making process.

3 Sections of a Proposal

Technical, Management, and Cost

Fixed-Price Contract

The customer and the contractor agree on a price for the proposed work. Most appropriate for projects that are well-defined and entail little risk.

Win Ratio

The percentage of the number or dollar value of a contractor's proposals that result in contractual agreements with customers.

Management Section (Proposal)

To convince the customer that the contractor can do the proposed work (the project) and achieve the intended results.

Technical Section (Proposal)

To convince the customer that the contractor understands the need or problem and can provide the least risky and most beneficial solution

Cost Section (Proposal)

To convince the customer that the contractor's price for the proposed project is realistic and reasonable.

Unsolicited Proposal

a proposal that your audience is not expecting

Overhead or Indirect Cost

all those costs of operating a business that cannot be charged to any one product or process

The proposal must emphasize the

benefits

Cost-Reimbursement Contract

customer agrees to pay the contractor for all actual costs regardless of amount plus some agreed upon profit. Most appropriate for projects that involve risk.

A proposal is a:

selling document