Evaluating Contract Requirements: A Critical First Step

When responding to a formal request for proposal, A&D program managers need to gather as much specific detail as possible about the underlying contract, statement of work, or other available documentation. The old saying of “read the fine print” cannot be overemphasized, since a sound bid must be based on a careful review of all program requirements. Some of the most frequently overlooked areas in this review include:

The long view on contract costs and requirements. Many program managers unwisely overlook the full range of elements and variables that can affect long-term contracts. This may include inadequate initial development of program scope, understating the level of research and development work, not fully accounting for the costs of special materials or machinery needed for production, or not factoring in the availability and cost of new talent or outsourcing needed to keep the project on track.

A consideration of local environmental factors. While all A&D firms must comply with federal environmental rules, note that many state and municipal governments often have standards that affect only companies in those locations. If local regulators have more stringent rules on carbon emissions, curbs on industrial noise limits or other issues that a competitor may not face, the financial or production impacts of those rules should be factored into estimating the project bid.

An understanding of how shifting political priorities may affect contracts. Every election is an opportunity for shifts in budget priorities, particularly for defense-related activities. When estimating a long-term project, it’s wise to understand what protections the contract would provide if a significant political shift reduces – or eliminates – funding for that specific initiative at a later date.

Building a Better Bid for Long-Term Aerospace and Defense Contracts
Anticipate Production, Supply Chain and Outsourcing Issues

June 12, 2017