Should you use permanent staff or consultants to do your proposals?

Every company that creates proposals faces the question:

• Do we use permanent staff or
• Do we outsource the proposal function, by using proposal consultants?

This question is especially important to Government contractors, partly because a large effort is often required to prepare winning proposals. The question is often stated as follows: "What is the best way to invest our precious Bid & Proposal (B&P) dollars".

During the past 20 years, I have seen many companies facing this question. Their answers have ranged from keeping proposal preparation totally in house to outsourcing the entire proposal preparation process. Most companies fall in a spectrum between these two extremes, and use a mix of in-house staff and consultants. So the question becomes, "What is the right mix of permanent staff and proposal consultants?" The decision on where to be within this spectrum depends on two factors:

1. What are the business development goals: Let’s assume that the goal is to develop $40 million in new business during the next year. Let’s further assume that we have a 50% win rate and that we usually bid on contracts either in the $5-$10 million range or in the $20-$30 million range. Then arithmetic tells how many bids we will need to prepare, and our recent experience helps us estimate the quantity of skills and hours needed to get the work done.

2. How granular are the proposals? Although business development goals help define the quantity of effort needed to get the bids prepared, the granularity of the bids is even more important in determining how much effort to outsource and how much to keep in-house. A company bidding a large number of smaller contracts may be able to spread the effort so that they can handle all of their proposals in house. In contrast, a company bidding a few large programs, with gaps of inactivity between bids, can usually get the work done more economically using proposal consultants.

For many companies, the issue of whether to outsource or not and if so how much is not clear-cut. Given the uncertainty of RFP releases, for example, it is impossible to predict the timing of proposal efforts. Consequently, good luck in the release schedules may mean an evenly spaced workload that the in-house staff can handle well. However, when too many bids stack up at the same time, due to simultaneous release dates, the only solution may be to outsource.

Here are some guidelines for each approach:

Largely Permanent Staff Solutions

• Bids are highly granular, and it is easy to maintain a steady-state proposal preparation operation;
• The group has valuable trade secrets that would be compromised by using consultant personnel;
• Business development goals are modest, and the in-house approach used in the past is satisfactory.

Largely Outsourced Solutions

• The company typically bids a few large programs, producing a peak-and-valley workload in proposal preparation;
• The company is bidding programs in which the specialized expertise needed to win the contract is not available;
• There is a peak in the workload, due to simultaneous releases of several RFPs;
• The company wishes to make a large and dramatic increase in the volume of contract wins.

Nearly all the federal bidders we have seen maintain some type of a permanent proposal staff. In the case of those firms bidding large opportunities very infrequently, the permanent staff may be just a part-time coordinator. A more common behavior is for a firm to maintain at least the staff needed to pursue one proposal at any one time. This typically includes at minimum a proposal manager, technical writer, editor, and combined coordinator / desktop publisher / graphic artist. A few robust divisions of Fortune firms still maintain large departments with thirty or forty or more personnel.

Some companies with conservative business development goals outsource very little proposal work. They chose NOT to outsource, because they believed they could achieve their goals with only permanent staff. Many of those companies could have grown faster and could have achieved greater profits by using outside assistance to bid, and win, additional programs.

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