We see incumbents lose rebids fairly often. In fact, according to one recent report, 40 percent of incumbents lose U.S. federal contracts at rebid.
There may be good reason for these losses. Some incumbents perform poorly or fail to manage the relationship well. In others a more efficient (or foolhardy) proponent underbids the incumbent. But in many cases, the incumbent could have won—and wanted to—but simply mishandled the bid process.
Unsuccessful proposals often stem from lazy thinking, leading to beliefs such as:
1. Nothing much has changed
A “more of the same” proposal assumes:
- The client’s strategic drivers haven’t changed during the current contract
- The same individuals are calling the shots
- Technology hasn’t changed over the life of the contract
- There’s no downward pressure on budgets
- Your competitors will use the same approaches and pricing as last time
Really? If this describes your world, you’d be unique among the bidders we see.
2. The client loves us
You may have a warm relationship with your client—but don’t base that belief on one or two contacts. Given the natural desire to avoid conflict, the warmth may not run as deep as you think. And there may be others in the organization with more power who judge you less kindly.
Perhaps your client really does love you. However, if you’re bidding into a government agency or other entity with strict evaluation criteria, love will only take you so far.
In most cases, you’ll still need to win the technical portion and be close on pricing.
3. The client doesn’t want a transition
Transition risk and cost are significant issues in many situations.
But, against hungry competitors willing to waive transition costs and/or slash margins to win business, incumbents cannot rely on change aversion to win. This is especially true in competitions monitored by fairness commissioners.
Avoiding complacent thinking
Complacency is like weight-gain. It creeps up on most of us unnoticed.
It’s also hard to combat. Rather than vowing not to be complacent, decide on concrete actions your team will take to ensure a fresh look at rebid. Over the coming weeks, we’ll consider specific steps you can take.