USE TECHNOLOGY TO CREATE
MASSIVE CONTRACT MOMENTUM
WITH MICHAEL WEAVER, PROPRICER DIRECTOR OF CORPORATE STRATEGY
I am pleased to introduce Michael Weaver to the podcast today. Mr. Weaver is the Director of Corporate Strategy at ProPricer, where he has worked for nearly 16 years. Michael has extensive experience in business-to-business software management, including strategic planning, product management, and operations.
ProPricer is the leading provider of proposal pricing software products for defense and aerospace. The top 10 prime defense contractors utilize its software.
Michael, welcome to the Speed to Contract podcast.
Thank you for having me, Tim.
Great. Well, this is exciting. Full disclosure, as everyone knows, I've been involved with ProPricer at a board level for a number of years. I chair the board. At our last GCP Summit, Michael, it was inspiring to listen to General Holt challenge the audience with this whole idea of speed to contract, speed to market—and to do what we all can to make a difference. That is the reason for this podcast, where we brought on some of the industry's top icons to talk about their experiences… through their respective glasses. Whether they were policymakers, worked at DoD, worked in industry, worked for prime contractors, or worked on both sides.
Everybody has brought this experience to the table regarding speed to contract, sharing some of the most effective ways they've been involved in or envision helping—whether it's regulation or processes or utilizing the current system the way it is in a unique and effective way. So this last piece that we're going to talk to you about and others is technology, which we believe—obviously, and many others have shared— this is the next big step in being able to speed up the whole process across the industry.
For our listeners: Can you expand a bit about your role at ProPricer, what ProPricer does, specifically in helping contractors be more effective and efficient in working with the government, in moving contracts through the whole process?
PROPRICER PRODUCTS & THE MARKETS THEY SERVE
Here’s the elevator pitch I usually give: Anytime the government says they need bullets, bombs, tanks, missiles, guns, satellites, whatever, when they release that RFP, the contractors come in and say, "Okay, we can do that. Here's how much it will take, hours- or level of effort-wise, and how much it will cost." ProPricer Contractor Edition fits right into that realm. It's that piece that goes in and considers all of the hours, units, and costs for every milestone of the proposal. It prices it up. It allows you to slice, dice, and aggregate the data in whatever way you need to respond to that government RFP.
The companion side of things, the Government Edition of the application, allows those government agencies to take that proposal and start doing their technical evaluation and cost analysis.
While we help the government side of things and the contractor side of things separately, the actual process of transferring the data from the contractor to the government saves a significant amount of time. We can go into detail for each contractor or government perspective, but the biggest win is when sitting in the room with government agencies. We sit down and talk with them and say, "When you get a new proposal submitted by a contractor, how do you review it? Are you going into a new Excel workbook and then looking at that contractor's workbook, and then trying to recreate that data cell by cell while trying to see if you can come up with the same number— one to verify that the formulas are correct or that you've captured everything incorrectly?"
PROPRICER REDUCES 7 - 8 WEEKS OF WORK TO 30 SECONDS
When you get that proposal file from the contractor, the ProPricer user, and restore it in Government Edition, you're talking about 30 seconds. You're able to convert eight weeks into 30 seconds. Then start putting the focus of your efforts into that objective position and what it should cost, and you're going into the price for what negotiations should be. You're doing that immediately off the bat. As soon as you get that proposal submittal in, you're not taking those two months of recreating the proposal and double-checking that everything is working correctly.
That process, the re-creation of the proposal submittal process, is really not even about evaluating the proposal. It's about double-checking and verifying the Excel file. It's not about verifying that any of those numbers are correct. So when I ask, “Is that what you do?” they almost always say, “Yes.” Then I follow up immediately with, "How long does that take you? Is that a seven-to-eight-week process?" The absolute answer is always, "Yes, it takes us seven to eight weeks."
MASSIVE TIME SAVINGS WHEN BOTH CONTRACTOR & AGENCY USE PROPRICER
That is the most significant time savings we see—when both the contractor and the government agency are using ProPricer in sync. It's massive.
That's really interesting. ProPricer has been in business for over 32 years and is the leader in this niche. What about the contractors and agencies that aren't using ProPricer? What kinds of technology are they utilizing to stay up with those people? What are the problems with homegrown solutions or off-the-shelf solutions?
BESIDES PROPRICER, 2 OTHER SOLUTIONS ARE EXCEL & HOMEGROWN TOOLS
The two biggest solutions that people will use are either Microsoft Excel or homegrown solutions. Excel is prevalent in the small and medium-sized businesses where somebody that's got some macro skills has gone and created a workbook with all of these different interconnected sheets. They go in and price that data. They may copy and reuse that template from time to time and try to go in and reprice their proposal. Inevitably, they find that that workbook contains errors, whether in how the macro was created or how one formula is different from the rest of the sheet. That can cause issues.
A COMPANY’S $12 MILLION ERROR THEY HAD TO EAT
I was actually talking with one customer that we had modeled some data for. We were trying to show them all the different things in ProPricer, and how we could get their data to tie out. There was one section on a WBS where we said, "Hey, we can't get ProPricer to match this number. We're off by about $12 million." As they're looking at it, they go through their Excel sheet and realize that one of those formula errors in the Excel file caused them to submit a proposal and that $12 million was a cost that they had to eat. That was a proposal that they had submitted and won.
Right there, just being in that initial discovery conversation with them where we can show them, “Here's where your benefit comes in by using an application like ProPricer.” It was a $12 million difference right off the bat. Then how do you say “no” to that? When you're not sure about the fidelity of the data that exists inside of your Excel workbook? Those are real problems that can add up with lots of zeros on the end of it.
THE TOP 10 PRIMES MOVED FROM HOMEGROWN TOOLS TO PROPRICER
The other real competitor that we have is the homegrown tool. That's where the larger enterprises come in. They've got a team of people that have gone in and defined exactly how they build their contract responses, all of the special pricing details they do, and their competitive advantage that may set them apart. They build up a tool that goes into production and gets used for X number of years. Eventually, it reaches an end of life.
One of the things that's going on right now, especially with how technology is moving, is that most of these larger enterprises are undergoing a digital transformation. That's the buzzword that you hear everywhere right now. That's, “How can we strategically align our IT resources to help better facilitate the factory floor, or Just-in-Time procurement and delivery of items and keep all of our suppliers and vendors sending us the pieces and the parts that we need, or scheduling the resources that we need? Where are the errors that we may find in the production process? How can we realign our internal IT assets to those environments rather than creating a new tool?”
When they’re ready to make a decision, they can find that there's a generic proposal pricing software on the market that everybody else is using. You mentioned it in the intro, Tim, 10 of the top 10 government contractors are using it. And we've actually got over 50% of the top 100. It's the de facto industry standard. It's what everybody's using to price their proposals and get them to whatever government customer that they're using.
That Excel workbook— it can be prone to errors. The homegrown tool has often reached its end of life. It's a legacy software application that they must consider: "Do I go and rebuild it, or do I buy something that everybody else is using?" Those are the two main competitors we go up against when introducing ProPricer to people—Excel and homegrown.
That's interesting. Correct me if I'm wrong, but certainly, the top 10 primes utilizing ProPricer right now and its technology, as well as 50% of the top 100—a large percentage of them had homegrown tools at one time, correct?
EVERY NEW PROPRICER RELEASE INCLUDES UP TO 50 CUSTOMER-DRIVEN ENHANCEMENTS
Yes. The bigger the company, the more likely that is. We do a lot of business with small and medium businesses too. We see a lot of Excel pricing models that get built up. We incorporate whatever nuance they have in a generic way into this product.
One of the areas where we've been most successful is in creating a user-driven product. You mentioned how long we've been in business. However, I keep a startup mentality and say, "Maybe we don't know everything about how the pricing industry works. Why don't you tell us about what your pitfalls and your problems are and what those things are that make you different?" Then we will take those enhancements and feedback from those prospects and customers and incorporate it into the product.
Each new application release comes with 40 or 50 different enhancements from our user base, saying, "Hey, this is where pricing is going, or this is what sets us apart and makes us different. How can we do that inside of your application?" So it gives us a window into how pricing should be done inside of ProPricer and how our customers can most benefit.
Looking back on your experience, you highlighted two great examples here. They're not unique to those players that you shared about. Number one was a $12 million error that that contractor had to eat because the proposal was already accepted. The idea here—if you're going to use bulletproof technology from our organization or others with full-time players, looking at all the nuances—is making sure all the bugs are out of the tool. That's one way you're able to sleep at night knowing that you're not going to lose $12 million on someone fat-fingering a spreadsheet or having an incorrect equation inside the template or file.
That's one, and that's huge. But the other one you touched on is the time it takes to have two different databases and government proposals coming in and double-check it, up to six to seven weeks just on one proposal. You think of the thousands and thousands of proposals moving through and multiply that by six to seven weeks. It is a massive pipeline that starts to build up that you're replacing really with a push of a keypad button. That's done, and that six, seven weeks is eliminated. That's amazing in itself.
Going forward, though, technology is moving at the speed of light. We all know that any software platform has to be completely rewritten every five years because it's outdated. So you better have the full-time development team on board just to stay up with things. So there's been a lot of movement in the marketplace going to government and outside contractors. Bill Greenwalt shared an example of some of the reform that they led with the new Mid-Tier Acquisition Authority format that Senator McCain led from 2015 to 2018, which gave us the ability of number one, being able to invest $10 billion for vaccines into several companies that have never dealt with the US government and put them in play to get that $10 billion out for testing and get a product and get it distributed.
The other example Dr. Greenwalt talked about was the Falcon 9 project when Musk came in and stated that he'd be able to save the government 90% of the cost going forward. But with their product, the government would also experience a 10x increase in productivity. By utilizing Falcon 9, they were able to do that as well.
When we start looking at commercial products that have already been purchased, that have already been vetted out, give us an example of some of the new products that are coming forward from ProPricer that save time when looking at the past contracts that have already been okayed and vetted. And other opportunities are simply being able to buy off-the-shelf going forward, of having that in a database. Maybe you can share some products that are coming on the market right now.
BREEDING GROUND FOR ERROR: MOVING DATA FROM 1 DISPARATE SYSTEM TO ANOTHER
I always really hated the use of Excel as middleware. When you have to take data from one disparate system and translate it into another, you're trying to map data from that one format, that one layout, by copying it and verifying that everything is correct and then getting it loaded into the new system. That breeds a ton of potential for error, whether fat-fingering by manually typing things or through the copy-and-paste process.
We've got the ProPricer platform, we hope, handled. We're still taking feedback and always changing the way that product works. That's the Contractor Edition and the Government Edition. But what are those other systems that people need to be able to integrate with to cut down on that non-productive time? It's not just that seven to eight weeks that we see whenever they try to load a proposal into the Government Edition or into a new Excel file when the government receives a proposal. Still, there are times during the estimating phase on the contract side or the technical evaluation on the government side when they're doing a lot of manual stuff in Excel. Then they have to convert that data into priceable inputs, whether that's to go into negotiations as a contractor or as the government.
You've got subject matter experts or technical evaluators somewhere on both sides of that situation where they have to go in and say, "What are we building right now?" It's a ladder. It's a six-foot ladder, but is it titanium? Does it need to be hydraulic? Does it expand? What are the technical requirements for what it is that we're doing? Everybody's going to have a different approach.
IT TAKES MORE TIME WHEN DATA IS HOUSED IN DISPARATE SYSTEMS
They have to write this volume, this justification, and reasoning. Is this a wild guess? Is this something that we've done before? Is this a new commodity or a new technology? All of these different things come into play that have to be documented and justified.
That data is housed in a disparate system. It's usually in Word or Excel files, or it's in a SharePoint site or something like that. So that data, the numbers from that data, must then be captured and transferred into priceable data.
BOE PRO: PROPRICER’S LATEST PRODUCT THAT SAVES TIME & MONEY
For us, the most obvious place to go was to extend the ability of our estimator product. We've actually just released BOE Pro. This is a web-based application where we went in and built the capability for you to create a BOE template that exactly mirrors how your subject matter experts currently do their job.
It's not about them learning new software or a new application. It's about them having a template that lays out your methodology and your rationale, estimating method, calculation, and all of your justification pieces in the same format you are used to. Then ProPricer can read through that text and generate the calculation, the price piece to eliminate that capture process.
There's another seven weeks of time, at least three or four weeks, depending on the contract size, where you're reading through all of those disparate BOEs, trying to put them together and find those total values and then get them to the price data.
You think about that impact, not just the capture piece of it, but its impacts on the rest of it. Because when you spend three, four, seven weeks trying to take that data from one system and configure it and price it up to get it into another, that's time that the pricing teams don't have to make sure that the numbers are correct. And that’s not only for their internal review, whether peer review or management review, but also all those areas where they have to go back and double-check those inputs.
When you're verifying that “The 1500 hours that you told me that it was going to take is the actual 1500 hours that you have in your price,” you don't have the time to look back and say, "Well, why is it 1500 hours?" Or if management comes in and says, "Hey, we need to cut this to hit a specific number, or we need to factor some things up that you didn't account for; there's some risk involved," you have the opportunity to go in and evaluate why those numbers should be changed rather than just making sure that they're correct.
We tried to take that same sort of capture process that the government went through from Contractor to Government Edition and give the same power to the contractor and say, “All of those SMEs that are everywhere throughout your organization out there on the factory floor; all of your engineers and their drawings and all of the different circuit boards that they're putting together—the materials, the equipment commodities, jigs, all those things that they're trying to build— well, you get to spend your time working on those things, and the pricing team gets to work on verifying that the numbers are correct and priced rather than double-checking that all numbers were transposed and sent over correctly.”
BOE Pro is one that we're excited about. All of our customers can use it, because everybody has to write justification for what they think, even if they don't have to provide that to the government. Internally, you want to know how much something costs and if you will make money off it. “Is this something that is valuable to us? Should we invest time into this contract, or should we move on to something else that might be a little bit more lucrative?” That internal time you get back for the real evaluation of those numbers before submittal, cuts down on all the pressure you get at that 11th hour, right before submittal.
ESTIMATES FROM PREVIOUS PROPOSALS & BIDS ARE INSTANTLY ACCESSIBLE
"Hey, we've got a change from management that just came in." You get to those problems earlier in the process now. All of that stuff is repeatable, so all of your historical bids, all of your different estimates that you've used on previous proposals that are similar, they're there. When you get a new RFP out, you've got that kickoff meeting, you assign your material engineering or your manufacturing engineering, they go in, see the statement of work text from that RFP right there in the kickoff meeting, assign that to WBS and attach those SMEs to it right inside of the application and then pull in similar work. "Hey, this is 75% similar to something we've done; it's maybe just a little bit bigger.”
GAME-CHANGER: CUT DOWN ON NEW PROPOSAL STARTUP & LEAD TIMES
“Let's take that, factor the numbers up, fix some text, and now it's right there in the pricing department," cutting down on all that startup and lead-in time from the estimating process.
That's a potential game-changer for what we are trying to do: Removing Excel as the middleware and taking all that non-productive time out of the middle. Some of the other things that we're working on, if that answer wasn't long enough, is everything else that you do in the process. You get the proposal price, you get everything set, you've got all your BOE justification, you've got your bill of materials, your travel, all of your subcontractor costs, all of those things are inside of that price proposal, but now you actually have to submit the cost volume to the government.
“Here's the reasoning and justification behind not just the 1500 hours you said something was going to take, but why are you charging me $15 an hour, or $55 an hour, for this resource? Why are you escalating those resources by 3% or 5%?”
All of the reasoning that goes into the price of that proposal and the forward-pricing rate agreements and everything that they've signed—that all has to be submitted in about a 100-page document that includes a ton of ProPricer data. “Why don't we build something that makes it easier to get that ProPricer data into an application, such that as they're building the proposal, this stuff gets populated?”
The justification for their direct rates and their indirect rates and all of their travel and per diem and airfare rates, all of that stuff has already been done. Stop making them copy and paste different disparate data into the same file when you can use that as a starting point, hit the update button, and then see all of the inputs from ProPricer flow in, making that actual proposal submittal package even easier.
Of course, we're also working on things like integrations with other partners. For example, we're trying to partner with leaders in parametric estimating, people that do ERP, and people that do earn value management. Once you win that proposal, who will be doing the work? When you report the schedule and cost variances to the government, who's calculating there? How can we use that submitted proposal as an easy way to populate those systems?
You've got a ton of bill of materials that you're trying to get from all of your various suppliers and vendors. Well, let's get procurement involved and get them attached to the ProPricer proposal so they can say, "Oh, I see now that you have 50,000 widgets that you need to have delivered to you in January. Who's going to provide those to you?" It makes all—not just pricing, but estimating, procurement, earned value—it makes all team members’ lives easier because there's a single source of truth that the proposal pricing data can pass through to interconnect with all of their different systems. It's about having a proposal pricing suite that allows you to connect not just the tools that we sell but anything that you may already be using to help you get that proposal out the door faster and then let the government review it and get it awarded to you even quicker.
This is block-and-tackle stuff. It starts to run a chill down my back. When you think about the time that's saved, obviously someone that's trying to move through two or three proposals—we can double their output just by utilizing the right tools. It's a single source of truth. That's a big deal. At the end of the day, to say we're talking about this single source of truth so you don't lose $12 million on a contract. In this instance, there was not a single source of truth. That was a problem.
Single source of disaster.
Yes. But by having that single source of truth, everybody, all the way through the pipeline can sleep at night knowing that everyone’s on track, based on the original accepted proposal, and they can execute on it. Absolutely tremendous.
In closing, one of the things that ProPricer has done, and I have really appreciated working with the company at a board level, is the input it takes back from its clients. I know that Joe Shurance, the company's founder over 34 years ago, has led an annual user's conference and still does to this day. You want something changed? Tell us about it here, because it's your product. I know that happened with the new BOE Pro tool. Basically, you would work with a prime contractor interested in a new product and ask, “Can you help us build it?” Ultimately, it's been developed not only for them, but for the rest of the market.
The way that we look at it, especially in the case of BOE Pro, is, "Hey, we've got something that's a solution, but how can we make it better? Why don't you tell us about all the other things that go into what you need to get that proposal data inside of ProPricer, and let's completely expand that." They wanted it web based so that everybody was up to date on the same version at the same time. They wanted anybody to be able to use it. “So let's make a very simple interface that only requires a little learning. It's intuitive right out of the box. You can access it right away, giving it your historical data.”
CLIENT FEEDBACK IS THE MOST EFFECTIVE ROUTE TO NEEDLE- MOVING ENHANCEMENTS
We took that feedback and incorporated it, but going back to the point you made about what we call the enhancement meeting, we've always tried to get better customer feedback. For example, in the past, with the old International Users’ Conference, we used to bring everybody into the room for an enhancement meeting. There'd be a couple hundred people in the room, and we'd say, "What's broken? What don't we have?" They would submit a list of enhancements to us, and we would have everybody raise hands and say, "Who wants this?" and take a poll or a vote of the people in the room and then roll out those top 10 enhancements in the next release or two.
For me, I needed more because it's about more than just the people who can make it to the conference. Obviously, that's a very valuable opportunity to network and share, but we've got thousands of users throughout our entire universe that don't have the opportunity to come. Often, those are the end users that are actually using the product and trying to replicate something from their previous homegrown tool or Excel model. We opened up an enhancement voting portal where anyone using ProPricer, or anyone at their organization, can go into it. They can submit a new idea, which gets voted up or down by the user community. When those features are being looked at, anybody that needs that feature, we're able to reach out to them, show them prototypes and demo it to them and make sure that everything is correct and that it solves all of the needs for everybody involved before we release it out to the general public.
Those are free enhancements. We put those things into the application that our users have told us, “This is where we need to be able to do something.” It's really grown from when Joe first started sitting on a train shipping ProPricer in his laptop, taking it out there to customer sites and saying the exact same thing, "What are we missing?" to now. It’s that same mentality across our entire user base.
What I usually tell people in those enhancement meetings is, "It's always great to hear what's working well inside of the product. It's always nice to get a compliment, but I need you to be honest and tell us all of the things that don't work because that's the only way it's going to get better. I want to know all the problems you're having, or the issues you're having getting data moved from one place to another, or the button click you think should be there." So those are the people that we're going to sit down and talk with to make sure we get what they need in our product.
Yes, that's excellent. As we bring this to a close, Michael, the whole idea and background about technology being able to move us forward is obviously a no-brainer. “I'm able to save these kinds of dollars from a single source of truth. I’m able to save the six, seven weeks on every proposal for government. I don’t have to go back in and check up on data accuracy. I’m able to be more efficient and produce more—which ultimately leads us to speed to contract, speed to market, and better arming our warfighters in the marketplace.”
We appreciate your insights. We look forward to continued developments and, from the other technology players sharing on this podcast, other methodologies on speed to contract. Thank you very much. We appreciate your time and look forward to continuing the conversation with you.
We're all in this together. Thank you, Tim.
Good stuff. Thanks.