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Capture · 7 min read

Why Most Companies Lose on Price, and How to Stop

“We lost on price” usually means “we tied.” How best-value evaluations are really decided (from someone who sat on the deciding side) and how to stop being interchangeable.

J.R. Mullis Founder and CEO, ellimaC Partners

“We lost on price.”

I’ve heard that sentence from a hundred companies. Having sat on the government side of award decisions for years, I’ll tell you what it usually means.

It means you tied.

In a best-value tradeoff, which is how most negotiated federal awards are decided, price only becomes the deciding factor when the non-price factors come out even. The government is explicitly allowed to pay more for a better proposal. It does so constantly. When two proposals look the same on technical merit and confidence, the source selection authority has no defensible reason to pay more. So the cheaper one wins, and the debrief politely tells you price was the discriminator.

The real finding isn’t that you were expensive. It’s that you were interchangeable.

How evaluators separate proposals

Evaluators document strengths, weaknesses, and risks against the criteria in Section M. An award decision is built out of those written findings. Which means your job is simple to state and hard to do: give the evaluator strengths they can write down.

From the other side of the table

I never once saw a source selection pick a proposal because the writing was beautiful. I saw plenty get picked because the evaluator could defend the decision in the award file without breaking a sweat. Write for the file.

And when it really is price

Sometimes the solicitation is LPTA: lowest price, technically acceptable. Fine. Then the strategy conversation should have happened at bid/no-bid, not at debrief. If your offering wins on differentiation, an LPTA competition was never your competition. Pursuing it anyway isn’t aggressive. It’s expensive.

Three questions before your next pursuit. Does Section M reward what makes us different. Can we evidence every claim with numbers an evaluator can quote. Did we shape the requirement early enough that “different” matters.

If any answer is no, that’s the work. We don’t cut your price. We build the case that makes price the footnote. Let’s talk.

Written by

J.R. Mullis, Founder and CEO

Twenty-plus years of government acquisition experience, including service as a United States Air Force Contracting Officer. David Packard Excellence in Acquisition Award recipient. MBA, UNC Kenan-Flagler.

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