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How Are Government Contracts Awarded? 3 Tips to Improve Your Win Rate

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A contractor’s proposal is evaluated based on the use of labor and resources with the performance promised. These contracts are based on how different factors in proposals are valued by government agencies. Below you will find information on how government contracts are awarded, the government’s proposal evaluation, and tips on how to improve your win rate.

Basis for contract award

Best Value (BV) Evaluation

The U.S. government considers Best Value proposals with intangibles beyond price and technical rating. They are judged on price as well as capability, capacity, and past performance. The factors are either weighed equally or greater than price. This allows proposals that are higher priced to be awarded over one that is less costly.

Lowest Price Technically Acceptable (LPTA)

All factors other than price are evaluated as either acceptable or unacceptable without consideration given to higher levels of quality. Under LPTA, price is the determining factor when determining an award of a contract. Awards of proposals considered technically acceptable and meet the minimum performance requirements are chosen based on contracts with the lowest price.

Price Performance Tradeoff (PPTO)

PPTO permits tradeoff between price and performance factors to reach an award decision. It favors contractors with proven track record of providing quality products and services on time at affordable prices. Agencies perform a price reasonable analysis and then ranks proposals from lowest to highest. Only the lowest proposals are considered.

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Grading of Government Contract Proposals

Section 15.304 of the Federal Acquisition Regulation (FAR) provides guidance on the government’s evaluation criteria. It states the cost to the government is evaluated in every source selection. The quality of the product or service is considered based on the non-cost evaluation factors: past performance, compliance with solicitation requirements, technical excellence, management capability, personnel qualifications, and prior experience.” Each solicitation states how the evaluation factors are considered.

Those other than cost or price, when combined are either “significantly more important than cost or price; approximately equal to cost or price; or significantly less important than cost or price.”

Past performance assesses the confidence in the contractor to accomplish the proposal based on its quality, timeliness, cost control, and business relations. The scope and magnitude of effort and complexities of the solicitation is evaluated in contractor performance. Technical excellence factor consists of quality control and product management and order fulfillment. Management rating is based on order fulfillment, risk management, and transition plan.

The U.S. government uses the following grades when evaluating government contract proposals:
  • Significant Strength: A proposal of this rating greatly enhances the potential for successful performance or contributes significantly toward exceeding contract requirements in a way that provides additional value to the government.
  • Strength: A proposal greatly enhances the potential for successful performance or contributes significantly toward exceeding the contract requirements in a manner that provides additional value to the government.
  • Weakness: A flaw in the proposal increases the risk of unsuccessful contract performance.
  • Significant Weakness: A proposal flaw appreciably increases the risk of unsuccessful contract performance.
  • Deficiency: A material failure of a proposal to meet a government requirement or combination of significant weaknesses that increases the risk of unsuccessful contract performance to an unacceptable level.

Tips to Improve Your Win Rate

Read Request for Proposals (RFP) carefully

The most common reasons for inadequate technical evaluations are the lack of understanding by the evaluator of key issues of the proposal and not understanding the government’s requirements. If the solicitation is confusing or additional information is required to understand the proposal, the contractor should reach out to the agency representative to clarify what the government is looking to accomplish in its request for proposals (RFP).

Not all government contracts are the same. It is imperative to understand what the government is purchasing and how your proposal will be evaluated based on what is purchased. Contractors need to read RFPs carefully to ensure the contractor fulfills all its requirements. This includes pricing, timeliness, and all tasks required. If there is confusion regarding requirements of the contract, the agency representative should be contracted to clarify.

Bid on the right RFPs

Ask yourself “Is this RFP right for you and your business?” Chasing the wrong contract can lead to a waste of money, or a contract award that your company does not have the resources or capability to perform This can also lead to a lower past performance rating, which can negatively impact your next contract proposal. Instead of seeking RFP’s outside your company’s scope, it is better to identify opportunities that align with your company’s strengths. Information to help you target the correct RFPs can be found in the Federal Procurement Datta System, in industry articles, the agency’s budget and the RFP.

Adapt your proposal

Your proposal must be written specific to the solicitation. It should be written with its requirements and the agency’s evaluation criteria in mind. An agency that favors best value proposals should highlight what makes it better than one that is less costly for example. One size does not fit all.

For more information on how to win a contract that would take your business to the next level, contact Whitcomb Selinsky PC at (303) 534-1958 or book a free assessment below.

About the AuthorJoseph Whitcomb

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