How Can It Cost That Much? A Three-year Study of Proposal Production Costs

New business proposals to the U.S. Department of Defense vary so much in their production requirements that it has never been easy to estimate the cost to prepare them. Worse, new proposal managers lack the experience to anticipate the work required to prepare a winning proposal. In many companies, marketing and technical communication organizations find it exceptionally difficult to estimate and acquire the realistic budgets needed to win.

For the past three years, we have closely examined significant proposal efforts and discovered the six pillars of our department's proposal preparation costs. We have also derived a formula that characterizes proposal preparation costs in our environment. Our Cost Projection Factor estimate can be calculated in a minute and has demonstrated accuracy within 5 percent. Our purpose in preparing this article is not to reveal our proprietary proposal costs, but to demonstrate that a quick, accurate cost model can be developed for proposal publishing.