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Solicitations, Bids/Proposals, & Source Selections – Building a Winning Contract. Breakout Session # 202 Gail Parrott, NCMA Fellow Contracts & Pricing, 767 Tanker International Programs The Boeing Company April 23, 2007 1:40 – 2:40. Outline. Buyer expectations

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Solicitations, Bids/Proposals, & Source Selections – Building a Winning Contract

Breakout Session # 202

Gail Parrott, NCMA Fellow

Contracts & Pricing, 767 Tanker International Programs

The Boeing Company

April 23, 2007

1:40 – 2:40


Outline
Outline

  • Buyer expectations

  • Seller’s need to achieve loyalty, create value

  • Buying & Selling Life-Cycle

    • Structured Approach

    • Utilization value

    • 3 Phases


Buyers have high expectations
Buyers Have High Expectations

  • Knowledgeable

    • What options are available

    • What their rights are

  • Highest quality products/services

  • Low tolerance for poor performance

  • Needs/wants quickly change


Buyer seller relationship is comparable to
Buyer/Seller Relationship is comparable to

Ballroom Dancing


Achieving customer loyalty can be complex
Achieving Customer Loyalty Can Be Complex

  • Similar to a dance partner that

    • Sets a faster pace

    • changes the music

    • varies the dance steps


How a seller dances with a buyer
How a Seller “dances” with a Buyer

  • Listen to buyer’s needs

  • Proactively offer products/services/ business solutions

  • Meet or exceed buyer’s expectations

    Note: The partnership is important, but you must establish the correct dance space to not overstep boundaries and to not step over each others foot.


Buyer and seller feedback is crucial
Buyer and Seller Feedback is crucial

  • Know the difference between a partner’s needs and wants

  • Know how to treat your partner

  • Work together to achieve success




Key to success
Key to Success

  • Understand and implement the 3 Phases of Buying & Selling Life-Cycle

  • Buyers & Sellers must work together


The dance between buyer and seller
The Dance Between Buyer and Seller

  • More complex, lengthy and dynamic than ever before

    • Constant demand for rapid response

    • New competitors arise almost daily

    • Buyers want to cut cost and improve performance

    • Sellers must cut cost to compete


Buyers & Sellers, regardless of industry, must work together via a structured approach to prioritize and focus resources to maximize the opportunity to achieve mutual success.


Buying selling life cycle s structured approach
Buying & Selling Life-Cycle’s via a structured approach to prioritize and focus resources to maximize the opportunity to achieve mutual success. Structured Approach

  • Utilized in both commercial and government marketplace

  • Domestic, international, and global opportunities

  • Reactive – RFI, RFQ, RFP, RFT

  • Proactive – unsolicited offer


Buying selling life cycle s structured approach cont
Buying & Selling Life-Cycle’s via a structured approach to prioritize and focus resources to maximize the opportunity to achieve mutual success. Structured Approach (cont.)

  • Independent of geography and time zones

  • Utilized by single or global organizations

  • Supports a better, faster, cheaper business life


Buying selling life cycle
Buying & Selling Life-Cycle via a structured approach to prioritize and focus resources to maximize the opportunity to achieve mutual success.

  • Focus is on the customer’s problems/objectives

  • Meets seller’s requirements for profitability and risk

  • Drives both buyer and seller to the best solution


3 phases of buying selling life cycle
3 Phases of Buying & Selling Life-Cycle via a structured approach to prioritize and focus resources to maximize the opportunity to achieve mutual success.

  • Pre-Bid/Proposal Phase

  • Bid/Proposal Phase

  • Post-Bid/Proposal Phase


Buying selling life cycle1

From: Solicitations, Bids, Proposals, & Source Selection- Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

Buying & Selling Life-Cycle


Phase 1 pre bid proposal phase

From: Solicitations, Bids, Proposals, & Source Selection- Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

Phase 1: Pre-Bid/Proposal Phase


Phase 1 pre bid proposal phase buyer s steps
Phase 1: Pre-Bid/Proposal Phase – Buyer’s Steps Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

  • Step 1: Procurement Planning

    • Know “what” to procure and “when”

    • Determine which goods/services to provide “in-house” or “outsource”


Phase 1 pre bid proposal phase buyer s steps1
Phase 1: Pre-Bid/Proposal Phase – Buyer’s Steps Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

  • Step 2: Solicitation Planning

    • Determine specific requirements and deliverables

    • Identify potential sources

    • Analyze each source’s uncertainty & risk

    • Develop T’s & C’s

    • Choose methods & criteria for proposal evaluation and selecting seller


Phase 1 pre bid proposal phase buyer s steps2
Phase 1: Pre-Bid/Proposal Phase – Buyer’s Steps Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

  • Step 3: Solicitation Preparation

    • Request bids, quotes, tenders or proposals orally, in writing, or electronically

    • Communicate requirements to all sellers

    • Better solicitations result in better quotes


Phase 1 pre bid proposal phase seller s steps
Phase 1: Pre-Bid/Proposal Phase – Seller’s Steps Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

  • Step 1: Presales Activities

    • Proactive

    • Determining needs of current/prospective customers

    • Appropriately influencing customer requirements

    • Evaluating their competitors


Phase 1 pre bid proposal phase seller s steps1
Phase 1: Pre-Bid/Proposal Phase – Seller’s Steps Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

  • Step 2: Bid/No Bid Decision

    • Reactive

    • Multi-part Process

      • Understand the competitive environment

      • Assess risks and opportunities


Phase 2 bid proposal phase

From: Solicitations, Bids, Proposals, & Source Selection- Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

Phase 2: Bid/Proposal Phase


Phase 2 bid proposal phase buyer s step
Phase 2: Bid/Proposal Phase – Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007Buyer’s Step

  • Step 4: Source Selection Planning

    • Identify sources

    • Analyze nature of the industry/market

    • Develop criteria, weightings and procedures to evaluate each source

    • Select a source for contract award


Phase 2 bid proposal phase seller s steps
Phase 2: Bid/Proposal Phase – Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007Seller’s Steps

  • Step 3: Bid/Proposal Development

    • Proactive or Reactive

    • Simple or Complex

    • Compliant to requirements (T,D,F,C)

    • Plan Delivery of Solution

    • Identify gaps & develop risk mitigation plan

    • Develop Business Case (internal & external)

    • Develop the proposal (E,T,D,P,C)


Phase 2 bid proposal phase seller s steps1
Phase 2: Bid/Proposal Phase – Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007Seller’s Steps

  • Step 4: Bid/Proposal Reviews & Approval

    • Type & number of reviews vary

    • Internal Reviews (Pink Team)

    • External Reviews (Red Team)

    • Executive Review & Approval (Gold Team)


Phase 3 post bid proposal phase

From: Solicitations, Bids, Proposals, & Source Selection- Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

Phase 3: Post-Bid/Proposal Phase


Phase 3 post bid proposal phase buyer s step
Phase 3: Post-Bid/Proposal Phase – Buyer’s Step Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

  • Step 5: Source Selection Evaluation

    • Evaluate sellers offers

    • Evaluate appropriate qualifications

    • Selection should be made efficiently, quickly and as cost effective as possible

      Selecting the right source is like

      selecting the right dance partner.


Phase 3 post bid proposal phase seller s step
Phase 3: Post-Bid/Proposal Phase – Seller’s Step Building a Winning Contract, by Gregory A. Garrett and Gail A. Parrott, CCH 2007

  • Step 5: Oral Presentation & Responses to Questions

    • Provides opportunity to reinforce seller’s win strategy with buyer’s key decision makers

    • Oral vs. electronic


Phase 3 post bid proposal phase buyer s seller s joint steps
Phase 3: Post-Bid/Proposal Phase – Buyer’s & Seller’s Joint Steps

  • Step 6: Contract Negotiations & Formation

    • Follows source selection

    • Challenges to negotiating T’s & C’s

      • Lack understanding of own requirements

      • Communications breakdown

      • Cultural differences

      • Conflicting objectives

      • Haste


Phase 3 post bid proposal phase buyer s seller s joint steps1
Phase 3: Post-Bid/Proposal Phase – Buyer’s & Seller’s Joint Steps

  • Step 7: Contract Performance, Administration, and Closeout

    • Follows Contract Award

    • Periodic meetings to verify performance and expectations are being met

    • Conflict is inevitable, but generally manageable

    • Closeout process follows completion of deliverables, final administrative & legal details


Best practices in contract administration
Best Practices in Contract Administration Joint Steps

  • Reading the contract

  • Ensuring all organizational elements are aware of their responsibilities in relation to the contract

  • Providing copies of the contract to all affected organizations either paper or electronic copies

  • Establishing systems to verify conformance with the contract’s technical and administrative requirements

  • Conducting pre-performance (or kickoff) meetings with the buyer and seller

  • Assigning responsibility to check actual performance against requirements


Best practices in contract administration cont
Best Practices in Contract Administration Joint Steps(cont.)

  • Assigning responsibility to check actual performance against requirements

  • Identifying significant variances

  • Analyzing each such variance to determine cause

  • Ensuring that someone takes appropriate corrective action and then follows up

  • Managing the contract change process

  • Establishing and maintaining contract documentation: diaries, telephone logs, meeting minutes, inspection reports, progress reports, test reports, invoices and payment records, accounting source documents, etc.


Summary
Summary Joint Steps

  • Sellers must strive to provide value and achieve customer loyalty

  • Buyers and Sellers must work together

  • Understanding and implementing the Buying & Selling Life-Cycle is key to building a winning contract and ensuring success


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