Incumbent Contractor Advantage Guide 2025: How to Compete and Win
Learn strategies to compete against incumbent contractors. Understand incumbent advantages, how to overcome them, and when the playing field is more level.
Quick Answer: Can You Beat an Incumbent?
Yes, incumbents lose approximately 25-35% of recompetes. Incumbents have advantages (relationships, knowledge, past performance on this contract), but they also have vulnerabilities (complacency, known problems, tired solutions). Challengers win by offering fresh perspectives, innovation, competitive pricing, and exploiting incumbent weaknesses.
Incumbent Advantages
Understanding incumbent advantages helps you counter them:
Knowledge Advantages
- • Deep understanding of requirements
- • Know the real scope vs. written scope
- • Understand agency culture and priorities
- • Know the personalities and preferences
- • Aware of pain points and challenges
Relationship Advantages
- • Established trust with customer
- • Known entity vs. unknown challenger
- • Regular communication channels
- • Understands decision-making process
- • May have influenced the RFP
Performance Advantages
- • Past performance on this exact contract
- • Trained, experienced workforce
- • Established processes and systems
- • No transition costs or risks
- • Known price history
Practical Advantages
- • Access to site and facilities
- • Know the actual costs
- • Understand staffing needs
- • Aware of security requirements
- • Equipment and assets in place
When Incumbents Lose
Incumbents are vulnerable when certain conditions exist:
Incumbent Vulnerabilities
Performance Problems
Poor CPARS ratings, customer complaints, quality issues, schedule problems, or cost overruns.
Price Creep
Incumbent pricing has grown through modifications and may be significantly above market rates.
Complacency
Incumbent takes the win for granted, submits lazy proposal, or underestimates competition.
New Leadership
Agency leadership changes, new priorities, desire for fresh approach or different solutions.
Significant Scope Change
Major rewrite of requirements reduces incumbent knowledge advantage; all bidders start fresher.
Set-Aside Changes
Contract set aside for small business when incumbent is large, or vice versa.
Best Opportunities for Challengers
- • LPTA procurements (price matters more)
- • Incumbent has known performance issues
- • Major scope or requirements changes
- • New decision-makers at agency
- • Incumbent is distracted by other issues
Challenger Strategies
Start Early
Begin positioning 12-18 months before RFP release. Build relationships, understand requirements, and gather intelligence. Last-minute challengers rarely win.
Find the Pain Points
Every contract has problems. Find out what is not working through industry days, FOIA requests, and networking. Position your solution to address those specific issues.
Offer Innovation
Incumbents often propose more of the same. Offer new approaches, technology, or efficiencies that the incumbent cannot match without major changes to their established operation.
Price Aggressively
Price to win, especially if price is heavily weighted. Incumbent overhead and profit margins may be inflated from years of modifications. You can often underbid significantly.
Recruit Their Team
Incumbent employees often want change. Recruiting key personnel brings knowledge and reduces transition risk while weakening the incumbent's proposal.
Intelligence Gathering
Level the playing field by gathering as much information as possible:
Intelligence Sources
Public Sources
- • FOIA requests for current contract
- • USAspending.gov contract data
- • FPDS contract history
- • SAM.gov award notices
- • Published RFPs and amendments
Engagement Opportunities
- • Industry days and conferences
- • One-on-one capability briefings
- • RFI responses
- • Draft RFP comments
- • Professional association networking
Key Information to Gather
- • Current contract value and modifications
- • Incumbent staffing levels and structure
- • Known performance issues or complaints
- • Agency pain points and priorities
- • Decision-maker preferences and concerns
- • Changes in scope or requirements anticipated
Proposal Tactics
Do
- ✓ Address transition risk proactively
- ✓ Show you understand the work
- ✓ Offer concrete improvements
- ✓ Propose stronger personnel if possible
- ✓ Demonstrate innovation
- ✓ Price to win, not just to compete
Avoid
- ✗ Criticizing the incumbent directly
- ✗ Underestimating transition complexity
- ✗ Assuming lowest price wins
- ✗ Generic, non-specific proposals
- ✗ Ignoring incumbent past performance
- ✗ Treating it like a green-field opportunity
The Transition Story
Your transition plan is critical. Evaluators worry about disruption. Show a detailed, credible plan with specific timelines, personnel, and risk mitigation. If possible, include incumbent employees or demonstrate similar transitions you have successfully completed.
Defending as the Incumbent
If you are the incumbent, do not take recompete for granted:
Incumbent Defense Strategy
Maintain Excellent Performance
Your best defense is outstanding performance. Ensure CPARS ratings are excellent. Address any issues before the recompete.
Stay Engaged with Customer
Do not become invisible. Regular communication, proactive problem-solving, and relationship maintenance matter.
Do Not Get Complacent on Price
Review your pricing carefully. Years of modifications may have inflated costs. Be prepared to sharpen pricing for recompete.
Propose Innovation
Show you are not stale. Propose improvements, new technology, and fresh ideas. Demonstrate you are still invested in the work.
Frequently Asked Questions
How do I know if the incumbent is vulnerable?
Check CPARS (through FOIA or references), talk to industry peers, review any public complaints or GAO protests, and attend industry events. Agency dissatisfaction often becomes known through networking.
Should I bid if I cannot beat the incumbent on past performance?
It depends on evaluation weighting. If past performance is lower weighted than price or technical approach, you may still compete. For LPTA, past performance is often pass/fail — you just need acceptable.
Is it worth protesting an incumbent win?
Only if you have specific evidence of evaluation errors. Simply losing to an incumbent is not grounds for protest. However, if the agency failed to consider known incumbent problems or made procedural errors, protest may be warranted.
How important is teaming against an incumbent?
Very important if it fills gaps in your capabilities. A strong team can match or exceed incumbent experience. Consider teaming with former incumbent employees or subcontractors who know the work.
Find Your Next Win
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