Making the Cost Volume Count

The Cost Volume Makes Your Proposal a Winner I am sure many of you have heard that a good Technical Volume response gets you “in the door” during a source selection, but the Cost Volume turns that response into a winner. During the creation of the Technical Volume, we as offerors, try to ensure the customer understands how that technical response brings value (value propositions) to them. We do that by stressing how we bring benefits through lower cost, improved schedule, better quality, lower risk, and enhanced performance: things they value. However, in many cases when we get to the Cost Volume, we focus only on spreadsheets and numbers and not how that “bottom line” brings value to them. We must ensure that the Cost Volume reflects what the value(s) are tied back to that Technical Volume. How Offerors Accomplish This (A short Example) Think about advertisements you see on the television for automobiles/trucks. In a very short amount of time (30-45 seconds), those advertisements are trying to entice potential consumers with value propositions (benefits). For example:

• Longest running truck on the road today (quality)
• 100,000-mile warranty (quality and lower risk/cost in maintenance)
• Highest safety rating in the industry (quality and performance)
• Towing capacity (performance)

The cost of the vehicle is mentioned/displayed, but the real focus is on the value. These are items you—as an offeror—would emphasize in your technical proposal. But, you need to ensure these are clearly shown in your Cost Volume. How Can You Accomplish This Effectively?The bottom line answer: a really compelling Cost Volume narrative that ties the Technical Volume value to the “numbers” shown in the Cost Volume. This is one thing I see lacking in many Cost Volume submittals.To do this requires close coordination and communication between the technical leads and the costing personnel. To ensure the right values (benefits) are stressed in the narrative, I believe the technical leads need to be actively involved in writing the narrative(s).The narratives should demonstrate, to the cost analyst, how the spreadsheets (numbers) that follow bring value already shown in the Technical Volume.For example: If proposing services, discuss how the labor mix proposed can lower cost to them while bringing quality personnel, shorten any transition time (schedule), and enhance performance. If proposing a product outline how your choice is the best product to improve performance, quality, and lower risk.Even in the Cost Volume don’t be “afraid” to address risk and how you have assessed risks and that your proposed numbers reflect the risk mitigation approaches. Bottom LineDon’t make it difficult for the customer cost analyst to recognize the value in your response. Create a good Cost Volume narrative, including graphics that clearly show why your cost brings value to the customer.