How much should we spend on capture versus proposal activities?

Recently, we worked with Market Connections to conduct a short poll of federal government contractors regarding the effects of sequestration and the government shutdown on the government contracting community—and the changes these reductions are requiring contractors to make to their businesses in 2014.

One poll participant asked us, “During your research into Capture Management best practice, for planning purposes, do you have an estimation of the average hours spent or industry standard for hours spent by a Capture Manager between opportunity identification to bid decision?”

In response, Bob Lohfeld provided his insights.

I don’t think anyone has quantified it in terms of hours since that would vary greatly by the size (value of the job). A better way to look at the question is to ask the shape of spending over the life cycle of acquiring business. For this, there are some guidelines.

If your spend before the RFP is released represents half of your total spend to acquire a new business opportunity, then your chance of winning will be pretty good. In contrast, if your spending before the RFP is very little, then you chance of winning drops greatly.

The challenge for capture managers and new business executives is to get out in front of deals rather than be the last contender to show up for a bid. Capture is a well-defined process that takes time and effort to execute. If you don’t have the time and put in the effort, someone else will, and that greatly increases their chance of winning and reduces yours.

Strive for the 50/50 rule on major bids. Spend half the money on capture and half on the proposal. That will keep you out in front on important deals.

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Lohfeld Consulting