There are six basic steps that are taken in proposal preparation, not necessarily in the order list. They are: (1) marketing; (2) analyzing and making a bid decision; (3) planning; (4) designing; (5) estimating and (6) publishing the proposal. Although these steps generally are taken in the order listed, the marketing, analysis, and planning steps continue throughtout the process.
The principal step required to start out in a business venture is to find or identify a need and fill it. As a subset to this step, one can identify and generate new needs that are waiting to be filled by someone who makes available a work activity or work output on which the need is dependent.(…) Successful businessmen realize that the idea of aneed must be planted in the minds of their customers long before the proposal cycle is initiated. Throughout the proposal preparation process, the marketing function plays an important role in shaping and directing the policies, ground rules, and procedures used. As will be mentioned later, care must be taken to counterbalance the marketing departement’s optimism and desire to win new work for the company with realistic independent planning, scheduling, and estimating of the project by the performing elements of the organization.
It is through an analysis of the customer’s needs and of the proposing company’s capabilities of performing useful work that identifiable products and potential proposals are generated. This analysis will take many factors into account, but the criteria for selection of an identified need for further pursuit in the form of a specific proposal will most frequently be the profitability of the venture.
(…) Good planning and definition will help avoid dead-end projects, partially completed projects, and unnecessary duplication or overlap of work activities. A better job of proposal preparation, backed on conceptual or preliminary design and testing effort, means less wasted effort, more projects completed on time and within cost, and fewer dead end projects. Businesses are developing an awareness of the need for more systematic planning and financial analysis before initiating a venture. Recognition of the significant effect of economic factors and of the need for good planning has expanded the scope and content of the proposal from a simple document into a comprehensive technical, organizational business plan for accomplishing o work activity or producing a work output.
Planning, an essential step in proposal preparation, coupled with its close cousin, scheduling, is required to provide the realism and credibility needed in the proposal. In planning a work activity or work output, it is necessary to concentrate on as few alternatives as possible. One must beware of the professional planner who wants to be in continous planning mode with two or more alternatives being simultaneously analyzed in depth. Comparison of alternatives early in the need-identification phase is always helpful; but an early choise of a single alternative is usually very beneficial. The choise of a single alternative forces the resolution of key questions and assumes that the work can and will be performed in a selected manner. Planning includes all of the technical, organizational, and management aspects of the project and considers all marketing inputs, such as projected quantities, cost targets, and capture potential for the work.
Design work that is done as part of proposal preparation is usually conceptual design or preliminary design, although a final design of the work activity or work output will occasionally be required. When proposal is to be submitted for performing final design work, conceptual or preliminary designs are all that is needed. Design work for proposal preparation includes preliminary sketches, plant layout, flow diagrams, scale models, mockups, and prototypes. The degree of completion of design work, as evidenced by the number and types of drawings, models, mockups, components, or prototypes, is often a source evaluation factor. The design step of the proposal preparation process usually culminates in the preparation of the technical volume or technical section of the proposal.
Estimating is one of the most important steps in the proposal preparation process. Estimating includes predicting or forecasting the amounts of materials, number of labor hours, and costs required to accomplish the job. Credible estimating cannot be done without adequate planning and preliminary design of the work activity or work output being proposed. Estimating requires unique skills, usually multidisciplinary in nature, that must either be acquired by experience or by training in a special mixture of technical and business disciplines. This unique mix is most nearly approached by the industrial engineering profession, but includes business skills that analyze and optimize profitability, which have not traditionally been a part of the industrial engineering discipline. The estimating step of the proposal preparation process culminates in the cost volume or cost section of a proposal.
The publication step of proposal preparation includes the organization, writing, editing, art work, printing, and binding of the proposal document or documents. The publication capability and publication team should be an integral, responsive part of the proposing company’s organization. Opportunities for using high technology in the proposal publication process must be taken if one is to submit a competitive proposal. The appearance and accuracy of a proposal, although not usually numerically scored by the evaluator or by evaluation team, are important factors in the general impression made by proposal. They can engender confidence and could be a basis for initial acceptance or rejection. Fancy or elaborate formats or displays are unnecessary and in many instances are even undesirable as they give an impression of lack of cost consciousness. A neat, accurate, easily read, easily referenced proposal is an aid to evaluators and is an indication to the costumer of the type of work that he or she can expect to receive in reporting and documentation during the performance of the work.
(Stewart, Rodney D., and Ann L. Stewart, “Proposal Preparation”. New York: John Wiley & Sons, 1992.)