Value versus Cost

Value versus Cost

Better to pay a little more than you should
and get something you can use
than pay too little and end up with nothing at all.

Ah, Seth. He must have been watching when 14-year-old me bought those cute shoes in the discount basement of the department store. Or when 64-year-old me bought those cute tops in the discount store. Neither shoes nor tops stood up to being worn or being washed, which was pretty much their only job.

I’ve never been seriously tempted by the other end of the spectrum — overpaying for style — but I take the theoretical point.

Better as well to avoid paying a ridiculous amount
for something that never satisfies–
better to live without until you learn to see the curve.

What curve? Well, you’ll have to check out the post to see it, but I’m sure you already get the idea. Whereas some things really are too cheap to be good, some things are seriously more expensive than they’re worth.

Learning to see the curve–
that’s the benefit of deliberate experience, well earned.

What does this have to do with Proposal Land? Three things.

First, especially but not exclusively in sole-sourced contracts, it’s up to procurement officials to prevent over-specification of the requirement, the natural impulse of end-user types for several reasons. They just want what they want, you know? And then there’s the self-protection thing. You know?

“…the gold-plated RFP that comes from deep within the bureaucracy
is designed to avoid finger-pointing and blame,
not to actually buy something that gets us a return…”

Second, in competitive contracts, it’s up to procurement processes to prevent a bidder from “buying” a contract: deliberately underbidding to win the contract and counting on making up the shortfall through sneaky change orders (aka get-well amendments). (The competitive part of competitive contracting rules out someone adding cost for show, or winning if they do.) It’s hard to assess risk objectively, but scoring mechanisms that exclude any bids that are a pre-determined amount lower than the next-lowest compliant bid can push back on this nasty bidding trick.

Third, on the bidding side, it’s up to proposal management to set a reasonable target for proposal quality: detail, thoroughness, graphics impact, marketing whiz-bang, and what everyone today calls the Wow Factor. At some point, and sooner than most executives think, the proposal hits Good Enough. That’s the flat part of Seth’s curve. Spending more time, effort, and money is just spending more: It’s not getting any more that matters in an evaluation.

Where are we on the value/cost curve?

No matter where you reside in Proposal Land, it’s a good question to ask.

 

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