Contractors all have their list of assumptions. The customer will provide reasonable access to the site. The existing data will be usable. Government review time will be quick. The work will stay within the scope we’ve anticipated. If something changes, we’ll work it out.
Those assumptions can be necessary. They help develop a project approach, estimate staffing, and arrive at a price. But when we put them into a government proposal, we need to ask a very important question: are we simply explaining how we calculated our price, or are we changing the scope of work? In other words, assumptions might be acceptable. Exceptions might not.
A recent GAO decision shows why that distinction matters.
The Department of Homeland Security was buying cellular wireless management services for itself and its components. The work included handling device shipments and service-desk requests. The solicitation set performance standards for those services, including shipping turnaround and how quickly service-desk calls had to be answered.
The company that won the contract, WidePoint, had based its staffing and pricing on certain estimates, such as monthly shipping volume equal to 5 percent of the devices managed and monthly service tickets equal to 10 percent of that inventory.
Making those estimates wasn’t the problem. The problem was what WidePoint said would happen if they were exceeded: the applicable service levels would be waived unless the government provided additional funding for surge staffing.
The business concern is obvious. More work takes more people, and more people cost money. But DHS had established mandatory service levels and told bidders during the question-and-answer process that these service levels could not be changed. WidePoint’s assumptions effectively changed those requirements by limiting the circumstances in which they would apply.
When a losing firm protested, GAO concluded that WidePoint’s assumptions, in reality, took exception to material requirements, and DHS should have found WidePoint’s proposal unacceptable and ineligible for award.
That should give any contractor with a standard assumptions section a reason to take another look.
So what can we do? Simply deleting every assumption won’t resolve the business concerns behind them. We still need enough information to price the work, and we still need to understand the risk we’re accepting. The time to work through those issues is while we can still ask questions, adjust the approach, and decide whether the opportunity makes sense.
Ask the questions while there’s still time
If you can’t confidently price a requirement without qualifying it, raise the issue during the question period.
Is the scope clear enough to estimate the effort and resources required? What access, information, equipment, or approvals will the government provide, and when? Are the existing conditions documented? What does acceptance require? Can the delivery schedule accommodate the required reviews, inspections, and dependencies?
Doing this well means staying ahead of the curve. You need at least an early draft of your technical approach and pricing before the question deadline. That can be earlier in the process than you’d like, especially when you’re still assembling the team and figuring out whether to bid.
But we all know that some small details – with big impacts – don’t become clear until we get down to the brass tacks of drafting and pricing. A schedule may look reasonable until you account for material lead times and government approvals. An installation may look straightforward until you consider site access and existing conditions. A deliverable may seem well defined until you try to determine what it will take to get it accepted.
Getting that work started early gives you a chance to ask useful questions while the government can still answer them.
Make each question specific enough that the answer will help you decide how to perform and price the work. If the answer still leaves a significant concern, consider asking for a change to the solicitation.
Putting your preferred answer into the assumptions section doesn’t mean the government has agreed to it.
Be comfortable delivering what you’ve priced – or walking away
Before submitting, sit down with the people responsible for performing the work and walk through what you’re promising.
Can we meet these requirements with the approach and resources in our price? What happens if our estimates are wrong? Have we accounted for the required reviews, testing, and acceptance process? Are we relying on additional time or funding that the solicitation doesn’t promise?
Those can be uncomfortable conversations, particularly when everyone wants a competitive price. They’re still better conversations to have before submission.
If you don’t like the answers to your questions, or you can’t price the work competitively without accepting an unacceptable level of risk, you have a decision to make. You may be able to change your approach or adjust your price. You may also need to walk away.
We put a lot of time and effort into pursuing contracts, and it can be hard to stop once we’ve started. But winning work you can’t afford to perform isn’t much of a victory. Sometimes, the only winning move is not to play.
Give the assumptions section a real review
It’s easy to carry familiar language from one proposal to the next. Read it again against the current solicitation.
For each assumption, ask: does this describe the basis for our estimate, or say we’ll perform a requirement only if something else happens?
Pay particular attention to language about additional funding, schedule extensions, scope limitations, government dependencies, and relief from performance standards. Bring the people responsible for pricing and performing the work into that review.
The goal is to submit a proposal you can stand behind: a clear promise to do the required work at a price you’re comfortable accepting.
At Potomac Contracting Solutions, we can help you work through these issues while developing your proposal – from identifying questions early to coordinating the technical approach, staffing, pricing, and final review. If you could use another set of eyes on an upcoming response, let’s talk.