Winning Commercial Proposals: Contractor's Corner

By Dave Stafford

With larger commercial jobs, it is often not the low bid number that will get you the project. Rather, it is the exceptional, perceived value offered to your potential client through a hard-hitting, concise professional proposal.

In fact, the client may force you to provide a succinct selling proposal by stating, for instance, “Your offer/proposal must be broken down into four components and will be rated according to experience, scope of work, execution/quality assurance and pricing. The value of each is 15%, 20%, 25% and 40%, respectively.” In this example, you are required to really put some thought into what you are selling and how you will deliver, install, ensure quality and justify the pricing. Many bidders flunk the test when they don’t know how or do not put adequate time into presenting their proposal. Here are some tips to make your proposal stand out from the crowd.

COMPANY INFORMATION
Everyone likes to know something about the company: its personnel, expertise, size, years in business, physical plant and what they’d like to brag about. A nicely printed, colorful company brochure is quite helpful and should be part of any package. You might also include the link to a PowerPoint slideshow that vividly shows your company in its best light. Likewise, it is critical to have a well-designed website with multiple pages that extols your virtues.

A first step for many purchasers is to look up your company on the Internet and see what pops up. We’ve all been turned away from a promising company due to its poorly designed website, thinking, “If I cannot even navigate the company website, how can I expect them to handle my business?” If you’re going to use pictures of company personnel, spend the extra effort for quality pictures, taken in a group setting in a company uniform (which can even be a clean T-shirt). Go for a consistent appearance throughout.

PAST PERFORMANCE CREDENTIALS AND REFERENCES
As is the case in hiring personnel, the best predictor of future performance is past performance. That’s why, even if not required, one should include references with names and phone numbers. Look at the popularity of Angie’s List. And when it comes to some government contracts, a past performance evaluation from Open Ratings is a baseline requirement.

The absolute best reference is one where you’ve performed work for several years, have a warm relationship with an articulate person and have recently asked them (again) to be your reference. Do not take them for granted. Woo them, and if they agree to take a phone call or respond to an email, send them a thank-you note. If they go the extra mile for you, send them a “dinner on me” gift card. There is no better salesperson for you than a great reference. Treasure them.

The worst possible reference is one that you or some in your company have used in a boilerplate fashion. We’ve all been guilty of this, using the same ones over and over again and not updating our contacts. I once made a big mistake by using a large volume purchaser again without checking with her first. Her reference was less than stellar: “Yes, Dave’s done business with me for at least five years, and generally he’s done good work. However, he really dropped the ball on the last job. I thought I was going to have to hire another company to finish on schedule.”

That was devastating. When I talked with her, she reminded me that we had upset her carefully laid out remodeling schedule. References can make or break you and frequently will be used to rule you out if they don’t check out.

CASE STUDIES
With larger projects, and in a modified fashion for smaller ones, it is valuable to assess the current proposed project. Relate it to steps that have been taken on similar ones where you successfully completed the job to rave reviews (or at least good ones).

Whenever possible, use a case studies approach that clearly outlines your successful experience. This can consist of a short paragraph and be as simple as a description of the type of project, the major product type used and the value of the job. It may be expanded to multiple paragraphs in order to further explain timeline, critical steps, problems overcome, location and year of completion. In a relatively simple narrative, you might list three or four projects as case study examples, one paragraph each, on one page.

For larger potential, add more detail. Go back and review project files and notes. What unusual problems did you face and how did you solve them? Was there an unusually complex dilemma that you creatively solved? Did you complete on time and on budget?

Case studies may or may not include actual names. I would caution you to only use descriptive labels, such as a large law firm, a government agency, an airport or a hospital. Otherwise, this may be perceived as a poorly worded reference, and you may be asked for details that you are unable or unwilling to provide.

Case studies and project pictures may provide terrific, graphic examples of your professional prowess. Slide presentations, in Adobe or PowerPoint format, can be especially powerful. Just remember, the larger and more complex the job, the more scrutiny and layers of people involved in making the award decision. You need something to appeal to everyone.

DELIVERY AND QUALITY
What will it take in terms of time, personnel and personnel experience to deliver within the time schedule and at the standard of quality demanded? Once an order is placed, how much time are you allowing for production and shipping to your location, receiving and inspection? Perhaps explain, step-by-step, what happens after the 40’ trailer backs up to your loading dock. Outline the steps taken internally for checks and balances. When it’s obvious that thought went into inspection and delivery, your level of competence is raised to a higher level. How will the product be delivered to the job site, and in what increments? Will you be using multiple crews initially or a single crew for installation throughout the project? Do you expect to have a secured area for storage on the job site? If so, specify this.

Back up the promises for delivery of an excellent job by explaining how it will be accomplished in detail. An integral part of this is how the quality standard will be maintained. Any quality assurance protocol begins with inspection after the product is in inventory and continues while the product is being installed. Will you have a specific person designated for quality inspections? If so, at what frequency will inspections be done? It is most cost effective when you establish the expected installation standard early on, pointing out to the team what is and is not acceptable. Problems can be quickly eliminated by an initial conversation with the crew chief instead of an outright battle toward the end of the job.

PRICING AND PRICE JUSTIFICATION
Make sure you have the right price. Key dealer or project pricing is required for you to have any chance of getting the job. As most in the commercial arena know, dealer list price is just that, the price from which to start. If you are actively promoting a product line, doing the specification work or are known as a reliable, first-class installation contractor, then you should be rewarded with great pricing.

A good question to ask your vendor is, “Have you established project pricing for this particular job?” Asked in this way, it is very difficult to avoid a straight answer. “If so, what do I need to do to qualify for that price?” And you might as well ask, “Are you working with any other key dealers on this job?”

You will be able to tell as much from their hesitation as from the actual answer. And one should be astute enough to know if the quoted price is reasonable. Some retailers and small commercial companies wonder why they lose most of their commercial bids. The overwhelming reason is that they were using dealer list pricing or close to it.

Most clients or bid documents will specify exactly how you will need to present price information. Whenever possible, avoid a one-lump-sum price for labor and materials without a corresponding explanatory breakdown showing how the sum of labor, materials and tax equals the total price.

For some bids, instructions state that “unit prices multiplied by number of units must equal total prices.” This will prevent simple transposition errors from turning into what I call the “gotcha award” from a client. “How were we to know you made a simple addition mistake and didn’t include any labor for the job? We relied on your bid number and sent you an award letter, so you have to perform.” And so began the 18-month odyssey of a $615,000 project performed at no profit!

Keep in mind that once you expose your pricing, it is fair game for others to take potshots at you. Make sure you’ve carefully identified the products by name, quantity required, pricing per unit, the amount and type of take-up, prep, installation personnel required and timeline for completion. This may be further specified in a scope of work.

In one classic case, my client said, “You’re not the low bidder. Your product prices are too high.” I knew I had key project pricing, so I asked, “Are they furnishing the products specified or an ‘or equal’?” It turned out he was being offered a substitute product that had not been approved, so we got the job.

In another case, I asked the client if he had matched up the product quantities among the bids, since I knew there had been a last-minute addition of another area. Sure enough, the low bidder had not included the addition. And even though we were not the low bidder on one fast-track project, we got the job because we specified the type and number of crews to deliver and install within the timeline desired. “We determined that you offered best value when compared with another low bidder,” who did not offer those details.

A well-presented, carefully constructed proposal will give you the best chance to walk away with the project in spite of fierce competition. A poorly designed, lazy effort will ensure you won’t get a second look and may even rule you out on a best-value analysis, even if your price is the lowest. A superb proposal backed up by the company’s award-winning reputation will make up for some variation in pricing, even with publicly awarded bids. In more than one case, the quality of the proposal is what gave the purchaser the confidence to follow the best value approach rather than lowest price. Of course, “you can put lipstick on a pig, but it’s still a pig,” so pricing has to be close.

Spend the time now to put together a template with the necessary components for your next commercial proposal. It should be constructed so that project specific details may be easily inserted. For goodness sake, have someone craft this who can write well, using proper grammar and a dictionary. I guarantee that you will win more jobs and sell from a position of strength.

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