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Negative Past Performance Disaster: How One Company Overcame It

One day I got a call from a company I had helped prepare a proposal. They are a staffing company that specializes in healthcare workers. They are a small business and had lost their last five bids in a row. They called because they received an email informing them that they did not make the competitive range on the proposal I helped them submit.

My stomach leapt into my chest. A decent proposal should always make the competitive range. I was wondering what on earth went wrong and why I didn't catch it.

We arranged for an immediate debrief by the customer. The debrief was handled by teleconference, so I was able to listen in. The debrief started with the evaluators introducing themselves. Then each one read the notes from their scoring sheets. There was no discussion, just a presentation of how the proposal was scored.

When the past performance evaluator started, he took great pains to emphasize that because they used surveys, the results were a snapshot in time and could be a little different on every bid. He qualified his response so much before he even started that I knew something was up.

In 2004, on one of the company's projects, they had not staffed the open positions quickly enough. The customer ultimately issued a cure notice. My client responded by replacing the project manager and adding resources. The project was currently operating within specifications. But it's possible that the customer held a grudge. They responded to a multiple choice survey by selecting the option that they would not choose to do business again with my client if given the choice.

In a past performance evaluation, this is the kiss of death. It doesn't matter if the company has fixed the problems. They have a negative mark that's on their "permanent record." The customer maintains a database in which all contract actions are recorded. Every time they look up the project, the negative information is there. Not only that, but the contract was coming up for recompete in just a few months. I met with the head of the company and discussed the potential disastrous impact of the news. We identified several things to do in response:

The head of the company should immediately meet face-to-face with the customer

  • To clarify the customer's position and give the company leader a chance to hear it directly from the customer
  • To identify possible corrective actions
  • To demonstrate commitment

Even though the problems had been corrected, the company must rededicate efforts to restore customer satisfaction.

  • The goal must be to get the customer to enter into their database that the company has transformed into a superior contractor.
  • The company must be prepared to go well beyond the requirements to achieve this.
  • The company should recognize that "at risk" and low margin performance might be required.

Use innovative bid strategies to overcome past performance evaluation issues.

  • Revise/strengthen the past performance write-up to drive home all the things the company has done to fix the problem.
  • Team with companies that have proven positive past performance.
  • Leverage the Mentor Protégé program to use the mentor's references instead of the company's references.
  • Focus on developing business with other customers.
  • Purchase access to market research tools to identify other customers who purchase the services offered by the company.
  • Pursue other customers that do not have access to this customer's past performance database.
  • Give customers true discriminators so they have a reason to select the company that goes beyond price and past performance.

Example 1: Use teaming to provide an overwhelming depth of resources in areas where past performance shows weakness.
Example 2: Use management techniques from larger/engineering companies such as an online tool to coordinate/manage the team and formal/written escalation processes to ensure performance targets are met.
Example 3: Use creative hiring approaches so that you can bid staff as employees (as opposed to contingency hires).

Within two weeks, the head of the company had scheduled a face-to-face meeting with the customer whose project had reported the negative past performance (not the potential customer that the bid was submitted to). The customer contact claimed she did not know who had completed the survey or why it was completed that way. The customer contact said she was actually satisfied with the company's current performance. The customer was pleased to see the CEO taking an active interest in customer satisfaction and agreed to work with the CEO on follow-ups.

This left us a little confused. Did the survey go to someone else, or was the customer seeking to avoid confrontation?

About a month after the debrief, the customer issued a new task order request under the current multiple-award indefinite delivery/indefinite quantity (ID/IQ) contract. The customer had not released any new task orders for the last 18 months. There were 10 companies eligible to bid on the task order. We polished the past performance write-up until it positively shone, while knowing that we had no control over what is in the customer's database. We called the customer to make sure that the right person would receive and respond to any surveys.

Ten days after the task order bid was submitted, we found out that we had won. Not only had we overcome any negative past performance, but we had won the only task order issued in 18 months and the last one to be issued before the contract recompete. We also broke the company's losing streak on bids.

So was it the past performance write-up that itemized all the corrective actions and tangibly showed that the company is not only a much better company but one with strong current performance, or was it the face-to-face visit by the CEO showing commitment to customer satisfaction? My bet is on the visit, but the write-up put in place the information that the evaluator needed to overcome what was in the database.

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By Carl Dickson,
Founder of CapturePlanning.com and PropLIBRARY



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