I like coffee. The smell of the freshly brewed morning cup of coffee invigorates me. Just this morning I met with my mentor and I prepared as usual by getting to the cafeteria early with my cup of coffee in hand.
Our conversations usually range from project war stories to best practices and lessons learned. This time around, the discussion centered on a "must-win" proposal effort. You feel confident about the current proposal, but the day before the submission, you're called into the executive office and told the final cost must be reduced by another 20 percent.
Thoughts swirl through your head. Given that you're the project manager, you'll have to update the basis of the estimation so it supports this new, lower cost.
Many times a must-win proposal means being the lowest bidder, hoping to make up the difference from future change requests. If this is the case, then the direction from the executive office borders on unethical conduct.
Why? Because within defense contracting, a firm fixed price contract is the preferred choice for the government because any overrun would come out of the contractors' profit margin. Imagine that you know it would really take you US$100 to do the job but you bid US$80 knowing that you're the lowest bidder in order to win the contract in the first place. Once you are awarded the contract, you employ various strategies to bring to light that the customer really needs additional "enhancements" in order to fully execute their missions. Magically, the total cost of the enhancements seem to add up to another US$20, plus additional margin.
All bids must provide basis of estimation (BOE) to justify the dollar amount. On the day before the proposal submission if you are directed to lower the final bid number by 20 percent and there is no way you can revise the basis of estimation in time and you signature is on the proposal, then you are lying to get the business.
So what do you do?
I think that if the original basis is sound and was validated through independent review, then it's the job of the project manager to say no and explain why that can't be done without compromising the integrity of the submission.
Before I could for a response, my mentor said it was okay not to have an answer right then. When that day comes, my action will be rooted in principle and on doing what's right.
Does the end justify the means?
On a personal note, I'll be taking December off in anticipation of a new addition to our family. Best wishes to you for the various holidays coming up.
Our conversations usually range from project war stories to best practices and lessons learned. This time around, the discussion centered on a "must-win" proposal effort. You feel confident about the current proposal, but the day before the submission, you're called into the executive office and told the final cost must be reduced by another 20 percent.
Thoughts swirl through your head. Given that you're the project manager, you'll have to update the basis of the estimation so it supports this new, lower cost.
Many times a must-win proposal means being the lowest bidder, hoping to make up the difference from future change requests. If this is the case, then the direction from the executive office borders on unethical conduct.
Why? Because within defense contracting, a firm fixed price contract is the preferred choice for the government because any overrun would come out of the contractors' profit margin. Imagine that you know it would really take you US$100 to do the job but you bid US$80 knowing that you're the lowest bidder in order to win the contract in the first place. Once you are awarded the contract, you employ various strategies to bring to light that the customer really needs additional "enhancements" in order to fully execute their missions. Magically, the total cost of the enhancements seem to add up to another US$20, plus additional margin.
All bids must provide basis of estimation (BOE) to justify the dollar amount. On the day before the proposal submission if you are directed to lower the final bid number by 20 percent and there is no way you can revise the basis of estimation in time and you signature is on the proposal, then you are lying to get the business.
So what do you do?
I think that if the original basis is sound and was validated through independent review, then it's the job of the project manager to say no and explain why that can't be done without compromising the integrity of the submission.
Before I could for a response, my mentor said it was okay not to have an answer right then. When that day comes, my action will be rooted in principle and on doing what's right.
Does the end justify the means?
On a personal note, I'll be taking December off in anticipation of a new addition to our family. Best wishes to you for the various holidays coming up.
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