For small businesses, the learning curve from experience to mastery can be costly, especially in the world of federal contracting and proposal development. Read on to understand five common mistakes small businesses make in developing their responses to proposals and how to avoid them.

Mistake #1: Beginning at RFP

Mistake #1 is assuming the work begins with the proposal. Small businesses have limited resources and time. When paired with a sense of urgency to grow revenues, they often respond to an RFP without having conducted adequate capture. Starting the capture process at the RFP release is a slippery slope of lost B&P and a frustrated growth team. And, in most cases, the result is a proposal that lacks insight and credibility.

Recent signals from the government reaffirm that the proposal process begins far before the RFP release. So, what’s the solution to this all-too-common mistake? Focus on the “proposal before the proposal.”  Invest in market research responses, thought leadership, and client engagement to familiarize the government with your company’s superpowers. Focusing on these key elements will allow you to demonstrate what you offer, your delivery approach, and highlight key staff.

This investment isn’t one-directional. It provides you with the opportunity to gain critical insights into your client’s journey to achieving their business goals and how the procurement fits into that path forward.  The best advice is to start “must win” captures early and be willing to say the two hardest words in contracting—No Bid—when necessary.

Mistake #2: Proposal Gobbledegook 

Compliance matters. The government clearly tells industry what they need to know and how they want to see that information through the instruction and evaluation criteria. One of the critical mistakes that small businesses make repeatedly isn’t fully complying with those criteria.

Often the government receives proposal responses that meander, use alternative verbiage, and, frankly, don’t answer the government’s questions. This type of poor construction puts a burden on the government to decode what the bidder is trying to convey—a burden they neither have time for, nor responsibility to take on. With government now using AI in evaluation, such non-compliant proposals are even less likely to win.

Beyond neglecting to clearly convey the solution, small businesses often make the mistake of not providing adequate proof as to why the government should have confidence that what they’re offering will work. They rely on vague “trust me” statements and “answering the mail” regurgitation of requirements versus presenting a compelling argument.

These types of responses aren’t scoreable and, because of that, aren’t awardable. Crafting a winning proposal response takes time and true skill. Small businesses can avoid missing out on contract wins by simply ensuring their proposal is presented in a clear, compelling, and compliant manner and not forgetting to include those crucial proof points.

Mistake #3: Distinguishing Discriminators

When it comes to evaluating proposals, the question for TEP members isn’t only whether a company offers the widget it needs. It’s whether the contractor will deliver the widget in a way that is faster, more cost-effective, and with better outcomes for the government than its competitors. Proving a contractor delivers the better widget boils down to highlighting the differentiators within its expertise and solution that are credible, provable, and valuable.

For small businesses, the bigger mistake is typically not in proving the differentiator they present, but in accurately identifying real differentiators in the eyes of the client. Often, small businesses will mistake table stakes offerings for differentiators because they either haven’t adequately evaluated the competitive landscape, haven’t done their due diligence in understanding the government’s level of maturity in a specific arena, or, very commonly, have overestimated the strength of their offering.

To avoid this, small businesses should develop objective win themes and value propositions with a critical eye, tailoring them to specific clients and substantiating their merit with proof like metrics and measurable outcomes, competitive intelligence, and client pressure testing.  

Mistake #4: Misalignment of Technical and Business Plans

Cost realism is a minimum expectation for proposal evaluation. Failure to demonstrate cost realism can and has led to losses for many businesses, small and large alike. Cost realism goes beyond just whether labor costs match reasonable rates, instead speaking to how realistically work can be performed. Staffing plans and price proposals that don’t reflect a deep understanding of the work and its demands—either from a workload, skillset, or timing perspective—signal inexperience and risk and are quickly eliminated from competition.

Aligning the technical to the true demand of the work, proactively anticipating all constraints and complicating factors, and then ensuring that technical approach is clearly and completely mirrored within the pricing proposal is a critical step to a successful proposal. However, this is where businesses often make mistakes. Small businesses can underestimate or overestimate project demands or lack forethought about how to best right-size teams over time for cost containment.

These mistakes most often stem from a lack of management expertise but can often stem from overzealousness. In addition, small businesses may tweak pricing to race to a price to win or shift numbers to hit their >50% requirement as prime. What seems like a small tweak can have big ripple effects and result in a loss or, perhaps worse, at a win, can create delivery challenges that result in poor performance. Engaging the right expertise and ensuring cohesion across all parts of the proposal are key actions to avoid Mistake #4.

Mistake #5: Lack of Client Intimacy

The federal government, its policies, programs, systems, budgets, and people, are complex. Reading a SOW or PWS is like viewing the tip of an iceberg resting just above the water’s edge. It takes research, listening, and client expertise to identify the nuance within a solicitation and accurately respond to what the government is truly looking to achieve.

Many companies assume they have client intimacy, but it may be based on a lack of information, inaccurate assumptions, or internal biases. When this happens, the result isn’t just a proposal that misses the mark; you also run the ultimate risk of losing your client’s trust.

There’s no fix for mistake number 5. Gaining client intimacy takes real effort and the wherewithal to create meaningful opportunities to listen, engage, and critically consider all information available. To establish intimacy, you must be willing to invest in people, resources, and time.

Key Takeaways: Focus on the Fundamentals, Maintain Discipline, & Deliver Quality

The mistakes small businesses make in proposals aren’t typically the result of a lack of talent, intelligence, or capability. Usually, it’s from either a lack of experience or competing priorities and limited resources. Small businesses that are successful in the federal market grow because they pay attention to the fundamentals of capture, know their clients, and approach proposals and delivery with a focus on discipline and quality.