Each year organizations acquire goods and services using complex contract awards. Such organizations are referred to herein as “buying-organizations.” Complex contracts can be awarded through formal and informal bidding processes, sealed bids, or as sole-source contracts. The organizational decisions involved in awarding complex contracts to a particular vendor involves knowledge transfer of both the vendor's capabilities and the buying-organization's requirements or the particular needs being addressed. The buying-organization typically uses a multi-person decision process, referred to herein as the “decision-makers,” through two discrete decision phases, edit and evaluation, to select the final vendor and award the contract.
In many decisions involving complex contracts, it is relatively difficult to define the buying-organization's decision-logic. This is primarily due to the complexity of the contract requirements and cost elements, the various methods in which the vendors differentiate their products and services, and the confidentiality of the decision process. As such, it is sometimes difficult to identify the buying-organization's decision elements used to select the successful vendor.
Buying-organizations do not always select the vendor with the greatest utility. There are a number of contextual issues that arise in the decision process, and at times the buying-organization's decision can appear subjective, preferential, or even political. The contextual issues in the decision process are particularly troublesome due to the vendor's pursuit costs required to successfully win a complex contract. A typical vendor's pursuit costs can range from 1%-5% of the total contract value. For example, a contract valued at $300 million can cost each vendor between $3 million to $15 million in pursuit costs, with a win probability in many instances as low as 30%. In addition, the pursuit can tie up valuable resources from six to eighteen months. With such high pursuit costs, a vendor's decision to pursue a complex contract is considered strategic by the their governing organization; requiring a substantial financial and operational commitment. The vendor's decision to pursue a complex contract is based on their perceived probability of winning, and the availability of slack resources to support the pursuit. The ability to predict the probability of winning loses integrity if there is an incumbent, as well as historical issues with the buying-organization and/or the competition.
Vendors have long recognized the importance of influencing the final award decision after submitting their responses to a particular contract either by influencing the decision-makers, or by impacting one or both of the decision phases. A vendor's ability to increase its win probability in complex contract competition is highly beneficial for a vendor.