We’ve demonstrated how a contract waterfall report can reveal the true risks and rewards of your business. Now we’ll demystify the process to build the opportunities pipeline at the core of that report.
If your business development consists of chasing down contracts one by one or waiting for requests for proposals (RFPs) to drop, expect to burn lots of time and resources to make minimal progress.
The key to expansion is to populate an opportunities pipeline with the kinds of contracts that play to your strengths and move you toward your growth goals. To accomplish this, you must build a robust strategic plan based on your company’s advantages and deficiencies that position you in attractive markets.
Jump In Long Before the RFPS Drop
If an early step in your pipeline building process is to scour through the Contract Opportunities at websites like SAM.gov and GovWin, you’re way behind the game.
- Less than a third of federal opportunities make it to these website listings of federal contracts up for bid. Once they do, you’re up against everybody else in your niche. This makes it an uphill battle to stand out and understand the competitive field to effectively price.
- The proposal deadlines on contract websites are often less than two months away. If you’re not already familiar with agency staff and operations and understand how their mission is a match for your company’s services, a couple of months is probably not enough time to come up with a winning bid.
- It’s no small task to tailor contract search criteria that will produce listings that match your areas of expertise. A better bet for this task is a paid acquisition aggregator, such as GovWin from Deltek, that tailors searches to your past performance and includes forecasts and opportunities for contract and task order recompetes.
That said, an acquisition aggregator should be an auxiliary tool used to make sure good prospects don’t fall through the cracks. It does not stand in for creating a strategy based on what your company has to offer and who needs those services long before it’s time to answer an RFP. A proactive approach to acquire rather than chase the right opportunities is generally cheaper and more efficient. Hiring the right staff for the work is also key.
5 Steps to Build a Robust Federal Opportunities Pipeline
1. Don’t chase opportunities. Decide which ones are best for you.
This matchmaking step takes effort, but setting a business development strategy pays off by narrowing your targets to those for which you can deliver superior products and services for a profitable price.
- Assess your company’s capabilities and functional areas—what are your strengths and claims to fame in the federal marketplace? If you can’t dive in as a prime contractor, take on a subcontractor role to build a record of past performance. Another strategy is to bring in other companies as teammates to fill gaps in capabilities/functional areas.
- Set specific growth goals, whether they be revenue, new customers, and/or new markets. This process may include items such as market research, competitive analysis, and a wish list of federal agencies that match your ideal opportunity but are not yet customers. Identify the decision makers at these agencies and get to know them by walking the halls or signing on as a subcontractor.
- Analyze your past performance on contracts, particularly those where you delivered a high level of customer satisfaction, agency needs to be dovetailed well with your capabilities, and you were able to realize an acceptable profit What other areas of the government need similar work? This is where an acquisition aggregator can help you discover more agencies you should get to know better.
This step will provide a picture of what an ideal opportunity looks like to your firm.
2. Ask the important questions upfront.
With your ideal opportunity profile in hand, you can vet a particular contract, potential opportunity, or prospective customer to analyze whether it fits into your business strategy. For example:
- Is the opportunity supported by one of your agency targets?
- Does it fit within your company’s North American Industry Classification System (NAICS) code or product service code (PSC)?
- Does it fit with your past performance qualifications?
Each list of top priorities will be unique to the business. Yours may also include socioeconomic set-asides—such as veteran-owned or Section 8(a) small business—or the procurement vehicles being used—GSA Schedule, Indefinite Delivery/Indefinite Quantity (IDIQ), Multi-Agency Contracts (MACs), etc.
3. Populate your pipeline with all the necessary details.
Now that you know who’s worth additional time and resources flesh out the information on these leading qualifiers to populate a robust pipeline that functions as a strategic tool. Naturally, you’ll want to enter all the identifying information such as the agency’s name, points of contact, solicitation number, important dates (such as response deadline), and procurement status.
Then, record the logistical details that help determine how well this opportunity fits into your business plan. For example:
- Will you be the prime contractor or subcontractor? If you’re the prime, will you bring on subs? In either case, what are the workshare specifics?
- Will this be a single or multiple contract award?
- What is the period of performance? Are there option years?
- Is this contract firm fixed price, cost-plus, time & materials, etc.?
- What is the projected and actual contract value?
- What are the labor categories and full-time equivalents (FTEs) required?
4. Crunch the numbers.
Finally, crunch the numbers that reveal if this is a revenue-producing possibility worthy of a bid effort. These numbers may include:
- What is the monthly, annual, and total contract revenue?
- What rates will produce a profit?
- What is your Probability to Win (PWin)? You must have a defined PWin structure. Is the opportunity likely to push, or will there be a protest?
Remember that IDIQs have no revenue value until TOs/DOs are released or targeted. These contain all the legally required elements of a contract and allocate government funds for specific products and services. Until then, IDIQs are a vehicle, nothing more. Track individual TOs/DOs as separate opportunities, as they have their own bidding process.
5. Make regular maintenance a must.
Nobody has to tell a GovCon that the marketplace is an ever-evolving landscape. That’s why an opportunity pipeline is not a set-it-and-forget-it proposition Its strategic value relies on updating all those facts and figures when necessary. Priorities may shift significantly when new contract opportunities come on the scene. Tried and true customers can fall out of favor with a shift in mission or change in staff.
Create a set schedule for pipeline maintenance with relevant team members so the document reflects marketplace reality. A weekly review is extremely beneficial to assure that opportunities are current with the latest information.
Savvy business development groups will recognize that these weekly discussions drive real value as opposed to an empty routine to checkboxes with bad data. That bad intel can cost your company real money.
Do not be afraid to No-Bid an opportunity at any point for lack of sound intelligence. Throwing bids at the wall and hoping they stick is a weak strategy that rarely produces success.
The federal marketplace experts at CAVU can review your pipeline for financial realism as a key quality review. We can also apply our experience integrating pipelines into your financial forecast. This will provide a needed view of the overall financial impact, along with an indirect rate impact assessment.