What does Price to Win (PTW) mean?
PTW helps companies better understand their #govcon customers and win contracts and focus on opportunities where their probability of win (Pwin) is highest!
PTW is an early and iterative process where a company studies customer and industry tendencies and competitive best practices. Captures competitive intelligence and develops customer intimacy with a wide array of tactics and strategies that are constantly evolving per agency.
PTW helps determines what the customer truly values and understands their willingness to pay a premium for certain capabilities and where they will
likely make tradeoffs in the name of “best value” for a specific offering.
PTW clients learn which opportunities to focus on, which ones to disregard, and how to maximize their resources and profits.
What PTW is:
All things being equal, PTW means being $.01 less expensive then your competitor where quality (technically acceptable) is not a deciding factor
and is evaluated equally in the eyes of the customer. This is certainly true with lowest price, technical acceptable (LTPA) procurements but also in best value technical tradeoff (BVTO) ones when offerors are evaluated on equal technical footing during source selection. Where a company offers a superior product or service, determine that appropriate premium where the customer is willing to make a higher investment to ensure mission success.
What PTW isn’t:
PTW does NOT mean being the lowest price offer in all situations. No one has a crystal ball and PTW cannot predict how all competitors will respond to a given opportunity. Yet it will narrow down opportunities to a competitive range and help an offeror determine a precise pricing target that maximizes
their Pwin and expected profits by focusing on the perceived value of their capabilities and not solely on price.
PTW interprets historical contract spending data and analyzes targeted agencies’ preferences and procurement patterns. PTW conducts a top-down approach that analyzes the spending data and other similar past procurements to validate the independent Government estimate (IGE).
PTW asks the important questions:
- · Does the targeted contracting office typically compete task order opportunities via a blanket purchase agreement (BPA) or indefinite-delivery/indefinite-quantity (ID/IQ) contracts or does it conduct a lot of single source procurements?
- · Are there any funding patterns or standard contract types of these solicitations depending on requirements?
- · Does this agency typically conduct set-aside procurements, or does it allow for a “full and open” competition?
- · Is this agency one that is typically protested by unsuccessful offerors?
- · Do contract awardees spend all their ceiling amounts or are they leaving money on the table?
PTW tracks competitive signals that appear in various stages in the procurement lifecycle. PTW conducts a bottoms-up (competitive assessment/likely cost) approach that analyzes potential offerors, their customers and contracts, and any other useful financial information that can be gleaned from intelligence-gathering activities.
PTW asks the important questions:
- · What companies are showing up at industry day or trade shows?
- · Who is registering as an interested party?
- · What questions are being asked on the solicitation?
- · Is another company contacting your employees (if an incumbent) or who is recruiting for similar positions?
- · If a public company, how did their last quarterly filings look?
- · Which competitor team (including subcontractors) poses the biggest challenge and how can you position your company to best mitigate this threat?
Having a well-defined PTW process will assist companies to make a bid / no bid decision earlier in the process and determine which opportunities to jettison from their pipeline. PTW blends art and science disciplines to find the right balance to effectively leverage resources and maximizes return on investment, providing a strategic advantage to companies who engage in PTW activities. PTW enables companies to focus on the opportunities where their Pwin is greatest and that will grow a profitable business.