In aerospace and defense, pricing is shaped by contract type, audit exposure, and what the government thinks fair looks like – not by what your capability is worth. Most suppliers either leave margin on the table to win or price themselves out of a recompete. We build a pricing approach that wins the bid and protects the margin across cost-plus, fixed-price, and commercial-item work.
The Problem
Cost-plus pricing trains you to forget what value is worth
When most of your revenue comes through cost-plus contracts, your whole organization learns to price by adding a fee to documented cost. That works inside the contract, but it leaves you helpless the moment you face a fixed-price bid or a commercial-item opportunity where value, not cost, sets the ceiling. Teams that only know cost-plus systematically underprice commercial work and overprice competitive bids.
Recompetes turn into a race to the bottom you can't afford
When a contract comes up for recompete, the incumbent advantage is real but fragile, and competitors will bid aggressively to take the work. Suppliers panic and slash price to protect the base, gutting margin on a program they may hold for a decade. The reflex to defend revenue at any cost destroys profitability across the life of the follow-on, and without a deliberate pricing position going in, you negotiate against yourself.
Commercial-item pricing is a margin opportunity you're scared to take
Selling a dual-use product as a commercial item lets you escape full cost-accounting and price on value, but it requires defending commerciality and a pricing basis that survives scrutiny. Most A&D suppliers either avoid the commercial path entirely or price it like a government cost build-up and surrender the upside. The money is in pricing the product like a product, not a contract line, and few suppliers have the discipline to do it.
Pricing decisions live in finance, disconnected from capture and BD
In too many A&D shops, price is calculated by analysts after capture has already shaped the pursuit, so strategy and number never meet. The result is a bid that is technically compliant but strategically blind to what the customer will pay and what competitors will offer. Pricing becomes arithmetic instead of a lever in the win. When finance and capture do not share a pricing strategy, you bid in the dark.
How We Help
We start by separating your portfolio by contract type, because pricing strategy means something completely different across cost-plus, fixed-price, and commercial-item work. We look at where your margin comes from, where you are competitive and where you are not, and where you are leaving money on the table because you price every opportunity the same way. The first deliverable is usually a clear map of which parts of your business need value-pricing discipline and which need cost-defense discipline.
From there we build a pricing position for your competitive bids before the number gets calculated. We work with your capture team to understand the customer's budget reality, the likely competitive field, and what the program office values, then set a target price and walk-away floor as a strategy decision, not a spreadsheet output. You go into a fixed-price bid knowing what you are willing to win at and why.
We treat commercial-item pricing as a real opportunity to capture value. For dual-use product lines, we help you build and defend a commercial pricing basis so you can price on what the product is worth rather than on a government cost build-up, pressure-testing the commerciality story so it survives scrutiny. Done right, this is one of the highest-impact margin moves available to a defense supplier.
We build a deliberate recompete pricing strategy long before the recompete lands. Instead of slashing price in a panic, we model the incumbent advantage, the realistic competitive threat, and the margin you must protect across the follow-on's life, then decide where to hold firm, where to give, and how to frame the value that justifies your price. The goal is to keep the work without giving away a decade of margin.
We connect pricing to capture and BD so the number is a lever in the win, not an afterthought. We embed pricing thinking into the pursuit from the start, so strategy, technical approach, and price tell one coherent story. This is where a sharp growth strategy turns pricing into a competitive weapon, measured against win rate and realized margin together.
What we deliver
- Contract-type pricing map – where your portfolio needs value pricing versus cost defense, and where margin is leaking
- Competitive bid pricing positions – target price and walk-away floor set as strategy before the number is built
- Commercial-item pricing basis – a defensible value-based price for dual-use product lines that survives scrutiny
- Recompete pricing strategy – a deliberate plan to hold work without giving away follow-on margin
- Capture-integrated pricing – price embedded into the pursuit so strategy, technical, and number tell one story
In defense, most suppliers price every deal like a cost-plus contract – even the ones where value should set the price. The margin is in knowing which contracts to price by cost and which to price like a product.
Our Methodology
Our engagement starts with a portfolio pricing audit rather than a single bid. We separate your work by contract type and look at realized margin, win rate, and where your pricing approach is mismatched to the opportunity. Most A&D suppliers find they are bleeding margin on commercial-item work they price like a government contract, and over-defending price on competitive bids they should be more aggressive on.
The second phase builds the pricing discipline for each motion. We set value-pricing logic for commercial and dual-use product lines, competitive positions for fixed-price bids, and a recompete strategy for the programs you need to hold. We work with capture and finance together so the position is a strategy decision, not a downstream calculation.
The third phase runs against live pursuits and tightens over time. Unlike a consulting firm that hands you a framework and leaves, we sit in the actual bids and recompetes and measure outcomes on win rate and realized margin. After each major pursuit we run a post-mortem and adjust the positions, so the discipline compounds across your pipeline instead of resetting every bid.
How We Work
Pricing engagements are built around your live pursuit and recompete calendar, so the rhythm follows your active bids. The first 30 to 45 days are the portfolio pricing audit and building positions for the most important near-term pursuits, after which we move into a cycle of bid-by-bid pricing support and periodic portfolio review.
The team is a strategist who understands defense contract types and capture, working alongside your pricing analysts and capture leads rather than replacing them. You provide access to your finance and pricing function and to the capture managers running active pursuits. We bring the value-pricing discipline; your team owns the cost models and compliance.
We run pricing reviews tied to each major bid and recompete, with a post-mortem after each pursuit closes that feeds the next cycle. Because defense pricing is shaped by a small set of repeat customers and contract vehicles, the positions compound – the discipline built on one pursuit sharpens the next against the same program office. Most suppliers see value within the first two or three significant pursuits.
- Margin recovery – commercial and dual-use work priced on value instead of a government cost build-up
- Disciplined bids – competitive pricing positions set before the number, with a defined walk-away floor
- Protected recompetes – follow-on work held without giving away a decade of margin in a panic
- Pricing as a lever – price integrated with capture so it helps win rather than just clearing audit
If your aerospace & defense company needs pricing strategy leadership, we should talk.
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Frequently asked questions
How is pricing strategy different for cost-plus versus fixed-price defense contracts?
Cost-plus contracts pay a fee on documented cost, so the discipline is cost defense and audit-readiness rather than value capture. Fixed-price work shifts the risk to you, which makes the pricing decision genuinely strategic – you have to set a number that wins while protecting margin against your own cost risk. Most suppliers run cost-plus logic on fixed-price bids and win unprofitably, so we build a distinct approach for each contract type.
Can we really price a dual-use product as a commercial item to improve margin?
Often yes, if the product genuinely meets commerciality criteria and you can defend the pricing basis. Selling a dual-use line as a commercial item lets you escape full government cost-accounting and price on market value, which is frequently a meaningful margin gain. The work is in building a pricing basis and commerciality story that survive scrutiny, and we help you assess whether the path is real for your product and price it to capture the upside.
How do we price a recompete without gutting our margin to keep the work?
The first move is to stop pricing out of fear and start pricing from a model of the actual competitive threat. We map the realistic chance of a competitor taking the work, the value of your incumbent position, and the margin you have to protect across the follow-on's full life. From there we decide where to hold firm and where to give, and build the value justification the program office needs to accept your price – keeping the work without surrendering a decade of profitability.
How does Winston Francois work with our existing pricing and finance team?
We work alongside your pricing analysts and finance function rather than replacing them. They own the cost models, compliance, and the mechanics of the bid; we bring the value-pricing discipline and strategic framing that connects price to capture. We sit in the live pursuits with your capture and pricing people so the position is a shared strategy decision, adding the discipline that finance-driven pricing usually lacks rather than duplicating work your team already does well.
How do you measure whether a pricing strategy is actually working?
We measure win rate and realized margin together, because winning at an unprofitable price is a loss in disguise. We track which pricing positions held under negotiation, where you left value on the table, and where you priced yourself out of contention, then run a post-mortem against those signals after each significant pursuit. Over a few cycles the pattern shows whether the discipline is improving both win rate and realized margin.
What type of aerospace and defense company is the right fit for this service?
This fits suppliers with a mix of contract types – especially those with dual-use or commercial product lines they are pricing like government contracts, or those facing important recompetes. If your pricing is calculated in finance with no strategic connection to capture, there is usually real margin to recover. The first step is a portfolio pricing audit that separates your work by contract type and finds the mismatch.
