Walking Backwards: Timeline for Rebids

by Chris Arlen on November 12, 2010

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Why does rebidding a contract you already have come as a surprise? The time just slips up on you, and there it is, an RFP on your desk for one of your major accounts.

Now you’re desperately trying to do something clever like:

A) Convince your customer not to go out to bid – too late Clyde…or…

B) Implement cost savings & innovations in the month or two before the bids are due, or save them for the bid? – that’s a dilemma…or….

C) Work through the bid process as the RFP dictates,  being really & truly good so your customer will automatically resign you – hoping for an early Christmas present are we?

The unfortunate reality is that most contractors hand a new contract/account over to operations and forget about it until they receive the dreaded rebid RFP.

It’s as if the incumbent believes their service will stun their customer into never putting their contract out to bid.

When should you start rebid preparations?

The day you sign the contract.

Well, a day or two after you’ve celebrated and handed all the startup off to operations. Re-securing a contract takes much more preparation and thought than just making customers happy with your service everyday.

It takes time.

To get a sense of how much time, take a look at the following time line, which is typical for a good sized service contract, let’s say $250k per year.

9 – 12 Months Before Contract End Date

This is when you should begin implementing cost savings and service innovations for higher productivity and customer satisfaction. It will take several months before your expected results show themselves.

Once you have quantifiable results, then it will take another 1-2 months before that data shows up in your regularly scheduled Quarterly Business Reviews (QBRs). Your QBR is where you formally present your business results and re-validate why the customer chose you rather than your competitors. It’s one of a few critical venues you have to promote your success to your customer.

Beginning to implement changes now means you can show improvements in the first quarter. That means you can continue to accrue measurable benefits in subsequent quarters, and most importantly publish results in QBRs.

Also, you’ll seek to bring ever higher levels of customer management into your QBRs to show off your results. And that can take another quarter or two, which puts you 3-4 quarters into your service contract. Right at the time the annual rebid occurs.

SPEICAL NOTE: Outside of QBRs, this is the time to actively promote all the good things you’re doing to a broader audience within your customer’s company. For example, making sure the CEO’s admin is aware of the special services you provide her. The same is true for the VP of HR or Purchasing.

This is a marketing job. Do you really think your operations’ team can do this as well as you can? It takes a deft touch to communicate appropriately above and beyond your contact’s head, not like having a blimp flying overhead flashing the savings you’ve provided in neon lights. But much more integrated within the customer’s reporting and communication channels.

6 Months Before Contract End Date

Your customer’s procurement department is probably queuing up your contract for the rebid process about now. Depending on the dollar size of your contract, and how understaffed procurement is, they’re starting to:

  • assess the marketplace for your service (trends, pricing, over or under supplied, etc.)
  • identify possible suppliers to include in the upcoming bid
  • write the RFP (hopefully getting a Subject Matter Expert to help with scope, Service Level Agreements and Key Performance Indicators that will be built into the RFP requirements

Of course if your contract dollar size is very large, say > $2M, procurement may start earlier, and smaller they’ll start a little later, about 3 months or so before the contract end date.

60 Days Before Contract End Date

Procurement puts the RFP out and the cone of silence descends on your contacts. You can no longer influence the group of decision makers. You’re just following RFP instructions at this point.

45-50 Days Before Contract End Date

RFP responses from suppliers are due back

38 Days Before Contract End Date

Short list of suppliers announced. Time to bring out the dogs and ponies.

If you’re the incumbent, it’s very likely you’ll get asked to present in the short list. But don’t take that as a good sign that you’re going to retain the contract. Procurement includes the incumbent so it doesn’t fold up and walk away before the contract ends, knowing by their exclusion from presentations that they’re not going to be resigned. But who knows, incumbents can still win.

35 Days Before Contract End Date

Procurement negotiates pricing and terms with the #1 and #2 suppliers. They do this because if their negotiations fall through with their #1 choice, they have #2 already in place and can seal a deal without having to go through the whole RFP process again. Saves procurement face.

30 Days Before Contract End Date

Procurement notifies the losers, and the winner has signed the contract.

Day 1 New Contract

Hopefully, you’ve retained your flagship account, or you were fortunate enough to secure that big whale. Whoever starts service is already in the rebid cross-hairs. Now’s the time to start the show over again.

The Moral of the Story

If you’re the incumbent you know when the contract ends. Work backwards. Begin from the start of a new contract with a plan to retain it. And that’s much more than delivering world class service. Because customers always forget, and not all the important ones (future contract decision makers) hear of your greatness and value to them.

Good Luck
~~~~~~~~~~~~~~
Chris Arlen
President, Revenue-IQ

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