Building a Compelling Story for Your Price Position
The Challenge. SMA’s rigorous Basis of Estimate (BOE) development process results in a well-substantiated price. With customer budgets shrinking, cost is becoming the deciding factor in most procurements: make sure your bid price remains competitive.
The Solution. BOE Development uses a detailed, repeatable process and SMA SMEs with both estimating and engineering experience to substantiate your cost estimate. Our BOE team works with the Cost Volume Lead to execute this process.
Following a proven process results in BOEs that effectively substantiate cost estimates and solution approaches, reducing the likelihood of risk adjustments to your price.
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1. Understand the Work |
Clearly understand the work (read the RFP in its entirety), the PWSs, the work products to be produced, and any delivery constraints – metrics? |
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Gather and Validate Assumptions
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2. Identify the SMEs |
Identify and engage the SMEs who understand the work and who can design the solution; select estimators skilled in BOE development |
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3. Define Estimated Methods/ Calculations |
Determine the methodologies (analogous, parametric, engineering, empirical) and calculations you will use to establish your estimates |
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4. Compose the BOE and Estimate the Work |
Compose the BOE content; perform the estimation and capture estimates in a database for easy analysis, dissemination, and record permanence |
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5. Validate the Estimates |
Validate the estimates derived in light of reality and documents gathered to date |
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6. Perform Quality Assurance |
Assess completeness, reasonableness, consistency, and documentation |
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7. Execute Pricing |
Conduct pricing exercise based on your estimates |
Tailored to meet your needs. Since you don’t always need an end-to-end BOE Development solution, we tailor each engagement to meet your needs. Our typical BOE Development engagement comprises:
- BOE Team Lead: Lead client team in development, review, and submission of BOEs in coordination with the Cost Volume Lead
- BOE Authoring: Under direction of the team lead, execute the SMA BOE Development process
- Cost Model Development: Development of a estimating model mapped to the CLIN structure
- Just In Time Training: Training delivered to authors at various points in the process to introduce and reinforce best practices and improve quality
- Quality Assurance Reviews: Review of completed BOEs using SMA’s quality assurance standards to ensure they are complete, reasonable, consistent, and properly documented
- Cross Volume Consistency Reviews: An examination of consistency between the BOEs and other proposal volumes to eliminate disconnects, ensure consistency, and reduce an evaluator’s perception of risk
Have you ever bid a low-price solution and lost because your cost was deemed unrealistic? There’s nothing more disappointing than working diligently throughout the Capture Management and Proposal Development phases to create a vetted, low-cost, fully responsive solution and then have the cost deemed unreasonable, thus losing the competition. One leading factor for this outcome is a poorly substantiated cost estimate. When an effective estimate isn’t well supported, the results can be costly. Whether you’re bidding a services contract or building the next satellite constellation, make sure your estimate’s accuracy isn’t lost in translation and your price remains an asset, not a liability.
Next Steps
