Leading with Business Development in Alternative Procurement Markets
In our first post about alternative procurement, we talked about how the market for winning heavy civil business is shifting from traditional procurement methods, such as design-bid-build, to alternative procurement, such as construction manager/general contractor (CMGC), construction management at risk (CMAR) and progressive design build.
With owners establishing the selection criteria focusing on company and staff qualifications, contractors need to differentiate themselves to win business via trusted client relationships, high value solutions and innovation. Yet for many teams, it’s not a simple task to shift their current business development team from pitching work on a low-price basis to one that emphasizes the firm’s ability to deliver budget certainty, maximum qualitative and quantitative value working together with the owner and designer as a team.
“As a leader, if you don’t understand the strategic importance of making the shift and fully support the effort, it won’t succeed,” said Rich Rantala, president of R2 Client-Centric. “Succeeding in this space requires starting at the top and is fueled by dedicated business developers working in concert with operations using simple, repeatable project pursuit and capture processes or what I call the work winning secret sauce.”
Shifting Skills
Taking a bid team that’s solely focused on price and turning them into one that’s capable of capturing alternative procurement work requires focus, leadership and training. The people responsible for the most critical parts of your company will need to develop new skills and shift how they work to deliver on these opportunities.
Roles that will need redefining include:
| Role | Design-Bid-Build Responsibility | Alternative Procurement Responsibility |
|---|---|---|
| Business Development Manager | Focuses on finding design-bid-build projects that meet their bid schdules and winning via low prices. | Matches strategic framework with client relationships and high-value dialogue early in the sales cycle to position for and win new work via qualifications. |
| Project Manager | Responsible for project delivery regardless of bid submittal and associated risk with available staff including change order and claim management as required. | Provides seamless continuity from preconstruction into construction with a focus on budget/schedule certainty, risk mitigation, high-value innovation and other areas using proven staff shared with the owner before the job is awarded. |
| Superintendent | Field general responsible for delivering projects in accordance with design drawings, specifications and bid price. | Provides constructability, schedule, quality and safety inputs, working with the owner and designer during the preconstruction period before deploying decisions in the field. |
| Preconstruction Manager | Not applicable | Manages the preconstruction period with a focus on guaranteed maximum price (GMP) and bid package development, subcontractor prequalification, competitive bidding and value engineering. |
| Estimating | Charged with developing price to build based on a complete set of drawings and specifications. | Works with the preconstruction manager toward GMP with a focus on 30%-60%-90% design development stages and owner's independent cost estimator. |
| Proposal Manager | Focuses on development of qualification statements for prequalification purposes on design-bid-build projects. | Works with the business development manager, preconstruction and operations to build differentiating proposals with a focus on the owner's key issues, high-value solutions and providing a detailed project approach in response to the request for proposal. |
| Project Sponsor | Responsible for go/no go decisions and selecting and committing the available team to build projects. | Responsible for go/no go decisions and selecting and committing the best team to provide preconstruction and construction services. |
Developing a Customer-First Focus
Understanding the importance of client relationships and having a continuous, open dialogue with them beginning with first contact throughout the process from preconstruction to close will mean the difference between success and failure. It’s important to listen to their key issues and challenges, and to thoroughly understand the landscape of competitors to develop the differentiation necessary to win consistently.
“A successful business development program begins with strategy development,” says Rantala. “Don’t wait until a month before the RFP (request for proposal) comes out to meet with the client for the first time. Because if you wait that long, there is no way you are going to know their key issues. You'll be able to respond to the RFP with an impressive looking proposal, focusing on the RFP criteria, which is all about compliancy.”
“But what about that competitor who spent time with the client over the last six months getting to know the client, key issues, pain points and who also supplied sample RFPs,” Rantala continues. “Because they know the key issues, they will submit not only a compliant proposal but also one that differentiates them from the rest of the submissions because it’s focused on the client’s key issues, maximum value generation and project predictability. And that’s the problem when you react to RFPs instead of spending time with the owner. If you aren’t, somebody else is.”
To put customers first, you need a strategy and a framework for pursuing work. You’ll need to decide what markets to play in, whether it’s public and/or private sector work, and what clients and opportunities best fit your company. Once you have someone leading business development who can strategically drive repeatable behaviors, processes and tools to be successful, that will inform the rest of your staffing decisions.
