Unless you have someone who knows the specific geographic area, the decision makers, and can identify and work to mitigate the concerns of the opposition, you’ll have a hard time getting your project approved
By Keith Millhouse, Principal, Millhouse Strategies
Government and private-sector organizations approve billions of dollars in contracts and projects every day in this country. And despite all that deal flow, some companies do far better than others in winning those deals.
As a public servant for nearly two decades on municipal, regional, and transportation bodies, I’ve had a hand in awarding or approving more than my share of big projects and deals. And in that process, I’ve learned a few keys that can mean the difference between winning the project or ending up with nothing:
Get the Local Perspective. Too often, companies who have been successful in other geographic areas think “one size fits all” and that the same “cookie cutter” mold can be used to push through their big project without paying attention to the local factors. This mindset is often the difference between success and failure in winning a contract.
As one example, I think of a massive residential project near my Southern California town that wanted to build several thousand homes in a high-end development. What they wanted to build required voter approval for the project to go ahead.
The out-of-town developers wanted to frame their project merely as a “good development” that should be worthy of support. They hired a flashy public relations firm from out of the area that packaged it as they would for other areas where the builder had built homes.
I suggested they frame the question differently, as a choice between the kinds of projects that they were allowed to build under the property’s current zoning – which included a prison, a wind farm and even a pig farm – versus their upscale planned community with a lake that would be accessible to the public.
As a long-time resident, attorney and local official, I knew that many who lived in the fast-growing county were already deeply concerned about any additional large development. The requirement for voter approval for such projects was proof enough of strong anti-development sentiment that would affect any project’s prospects.
But the developers persisted in their approach, pitching it to voters purely as a good development, while opponents invoked concerns about traffic, pollution and other possible problems. When time came for the vote, the project lost by a margin of roughly 3-1. Ouch.
The lesson is pretty straightforward: Unless you have someone who knows the specific geographic area, the decision makers, and can identify and work to mitigate the concerns of the opposition, you’ll have a hard time getting your project approved. Every locale has its shoals and quirks. The key is to have someone who can navigate those challenges, and who brings relationships and local knowledge that can solve problems, build consensus and get projects built that benefit the entire community while addressing concerns of the residents.
Set the rules. If you can, get involved early in the contract-creation process, as in really early. That way, you can give input on the parameters of a request for proposals, and do it in ways that can help your side win.
Decades ago, when Motorola was the dominant source of communications equipment for law enforcement, it was well known for making sure the technical specifications used by many jurisdictions for buying police radios also matched the specs for…Motorola devices.
Such situations are rare these days, but regardless, make sure that you give your company the best chance to help set the decision-making field. As with hiring local experts, the goal should be to create as much of a home-court advantage as you can in any big decision.
Price matters, but don’t set yourself up to fail. Yes, price always matters in a deal, but it’s not everything. Sometimes, companies bid so aggressively to win a contract that they place themselves in jeopardy of default, either of the contract or of their entire operation.
I remember board members of a transportation body reviewing a large capital contract that featured a bidder who was desperate to get into the sector. The company underbid competitors by a whopping $100 million to make sure they would get the deal, which they hoped would be a door-opener with other agencies around the country. It was a good strategy, until the economy tanked and other agencies pulled way back on their capital spending.
The ultra-low bidder, meanwhile, was left with a contract that cost it big money every time it presented us with a deliverable. The result: The low bidder battered its own reputation as it repeatedly faced cost overruns, change orders and late deliveries. We weren’t happy, but we held them to their commitment, and the company took a big financial hit.
There’s a lesson here for decision makers, too. Of course the bottom line matters. But be careful about always taking the low bid without considering broader issues, such as whether a company is putting itself and your project in danger with an unsustainably low bid.
And if you’re one of the competing bidders, pointing out the potential problems of an ultra-low bid may be a way to get that contract after all; especially if some of the parameters developed early on in the RFP process give weight to factors other than prices, such as technical experience and capability.
What’s your differentiator? Typically, lots of companies can do a solid job on lots of projects. Those companies might be your competition. So what are you doing to differentiate your company’s offer? What’s the two percent “wiggle” that makes your company and your deal the best one for the job? Who on your team and/or what sets you apart from the competition? Figure that out, and you’ve got the inside track for a winning bid.
Keith Millhouse is an attorney, government relations and transportation/infrastructure consultant based in Southern California. He previously served as a long-time member of the Moorpark City Council, a member of the Ventura County Transportation Commission and a regional council member at the Southern California Association of Governments. As chairman of the Metrolink commuter rail system in Southern California, he helped make the agency an industry safety leader with the first operational commuter rail positive train control system, inward facing cameras and state of the art rail cars. He may be reached for business inquires at email@example.com.