Incumbent Contractor: Everything You Need To Know
Choosing an incumbent contractor for a new transit contract is often preferred and considered less risky due to the contractor's familiarity with the company.3 min read
2. New Metrics and Expectations
3. Increased Value
4. Fresh Perspective
5. More Competition and Fewer Opportunities
6. Obtaining Key Insight/Feedback
7. Competing with Incumbent Contractors
Choosing an incumbent contractor for a new transit contract is often preferred and considered less risky due to the contractor's familiarity with the company's processes, personnel, and past performance history.
However, choosing a new contractor could be beneficial if it comes with reduced cost, improved technology, increased efficiency, and performance. There is also a tendency for new contractors to over deliver in order to impress and retain new clients.
Although familiarity is reassuring, it's not a good idea to choose an incumbent contractor due to the perceived risk of working with new contractors. Sticking with an incumbent contractor that doesn't deliver in order to avoid dealing with changes may result in a lot of issues and challenges down the line.
New Metrics and Expectations
Working with new contractors allows transit agencies to start afresh with new metrics and expectations. By assessing the failures and weaknesses of the incumbent contractor, the agency can put in place better metrics and processes to ensure that the new contractor performs according to expectations.
New transit contractors can add more value to your agency in terms of finances. They could either deliver services at a lower cost—facilitating a leaner budget or produce a richer and more diverse set of services—leading to improved performance at the same cost. It may be difficult to assess which brings more value—increased performance and satisfaction levels at the same (or a slightly higher) cost, or the same kind of service delivered by incumbent contractors at a lower cost.
In terms of operational capabilities and expertise, new contractors may be able to offer a fresh perspective that speaks to the agency's goals and pain points. They can bring in new processes or technological solutions that will increase productivity and efficiency for paratransit operations. Due to a history of winning previous contracts, incumbent contractors may not feel the need to:
- Undergo additional training
- Bring in new equipment
- Hire new talent (subject matter experts and consultants)
On the other hand, a new contractor may be predisposed to up the ante and bring in additional tools and talent to win the contract.
Previously, incumbent contractors were confident of winning a re-compete based on the organic, year-over-year growth that was common in the past 10 years.
However, contractors no longer have that luxury of assuming that they can win a contract bid. Just because incumbent contractors participate in the re-compete process doesn't automatically guarantee a winning bid.
More Competition and Fewer Opportunities
Presently, it has become fairly difficult for incumbent contractors to win during the rebidding process due to more competition and fewer opportunities. As such, incumbent contractors must arm themselves with the information they need to win a re-compete—meaning that they must understand how they compare with the competition.
Obtaining Key Insight/Feedback
Although gathering key insights may require the use of independent, third-party research providers, the resultant feedback can be beneficial to contractors during the re-compete process and the contract's tenure.
Since government customers usually find it difficult to provide negative commentaries, honest feedback, and constructive criticism directly to contractors, the use of third-party research providers may become necessary.
In this new age of government contracting, it is vital for incumbent contractors to obtain honest feedback/insight from government customers in order to secure re-competes. They no longer have the luxury of assuming that they will automatically win the contract bid. With such feedback/insight, there is increased likelihood of enhancing performance and retaining existing contracts.
Competing with Incumbent Contractors
For new contractors, it can be extremely difficult to compete effectively with incumbent contractors that have a long working relationship with the government agency. However, they may succeed if they offer a more innovative proposal that is cheaper and better.
The key advice for winning government contract bids is to do something that no one else has done in a way that is much better and cheaper. If incumbent and new contractors follow this simple guide, they would find it much easier to pursue and win contracts. If the contractor only does something unique and innovative, there will eventually be a contractor that does the same thing but at a lower cost.
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