No. 1 Strategy for winning LPTA competitions: Leveraging the contract to offer the lowest price at a profit --------------------------------------------- Tuesday, August 12, 2014 On August 19th Nick Wakeman, columnist of Washington Technology, is hosting a discussion on the unique challenges of LPTA, its effect on federal contracting and how contractors are adjusting strategies to adapt. However, while his panelist include a business development guru, a retired admiral, and a mid-cap business executive – there is no subject matter expert on the most important aspect of winning an LPTA competition: Financing. While I am a fan of Nick and his publication, the framework of this discussion validates my prior claims that these “establishment” blogs and web magazines are really clueless about how the “common folk” win and survive on the “street.” Where the audience they speak to are primarily already “in” and comfortably there, the folks I speak to are either trying to get a seat at the table or keep the one they fought to get. While the “TA” (technically acceptable) in LPTA is easy enough, and in fact is window for Small firms to be competitive on opportunities they otherwise would not; it is the “LP” (lowest price) that usually decides winners and losers. Indeed, the question my clients seeks to answer in this type of competition is: “How do submit the lowest price possible while maximizing and insuring an acceptable profit margin?” This is the holy-grail of survival in our world; for, what does it profit a hunter to kill an anorexic buffalo? The key is leveraging outside capital to finance the effort – that is, not private finance, i.e., Banks, the SBA as proxy for Banks, etc, but the federal agencies as proxies to the Federal Reserve Bank. Essentially, our strategies center on bypassing the private financing options in lieu of customary contract financing through the government itself. This is all made possible by regulation and statute. Further, your focus should be on the effective interest rate of the working capital you plan to use, and no bank can offer you better rates than the Federal Reserve because that is exactly where they borrow their money! What do Boeing, Lockheed, and Northrup all have in common? They financed their growth to becoming publicly traded leveraging these same strategies. In summary, you would be foolish not to consider the need for financing as an integral part of your pre-proposal strategy with respect to any Government contract opportunity. Our strategies can turn an opportunity where, under your current financing policy, you would either break-even or be at a negative internal rate of return (IRR); into a profitable pursuit. LPTA is the best thing that could ever happen to Smalls looking to become Mids, and Mids looking to become Large… the smart ones at least. S/he that hath an ear, let her/him hear… R. Sutherland | boston-warwick *** Link to Post on LinkedIn: https://linkedin/today/post/article/20140812190330-10956904-no-1-strategy-for-winning-lpta-competitions-leveraging-the-contract-to-offer-the-lowest-price-at-a-profit
Posted on: Tue, 12 Aug 2014 19:07:21 +0000
Trending Topics
Recently Viewed Topics
© 2015