Don’t let request for proposals (RFPs) stress you out. Make the RFP process seamless and more productive for you and the bidders with these steps:
• Be clear about what you’re looking for. Determine what’s being sourced and how successfully it can be evaluated. Create a specific scope or statement of work to serve as a blueprint with specifications or custom components. If it’s a service, clearly explain what will be done, the frequency and the required qualifications or certifications by those doing it.
• Craft explicit terms of engagement. Be certain the terms for evaluating bids and awarding the business (or dissolving the process) are clear with no chance of misunderstanding — which may discourage viable candidates from participating in future RFPs. Stipulate you reserve the right to award the contract to several bidders or to dissolve or expand the process in the event of inadequate responses or other extenuating circumstances.
• Establish a realistic schedule. Allow a reasonable amount of time for bidders to ascertain your needs and to respond, or many qualified responders may drop out. Your team needs adequate time to evaluate bids and select the finalists. When sourcing basic items like tools or paper supplies, choosing finalists may not be necessary since your decision will be based on the best and final bids. If you’re planning a “best and final” process, stipulate that and don’t deviate — or bidders may not take your next RFP seriously.
• Permit flexible responses. Don’t write rigid or condescending text like, “a bidder’s failure to submit exactly what is requested will result in automatic disqualification.” Plus, for RFPs involving labor and for free-forming products, avoid spreadsheets.
• Embrace alternative solutions. Though you’ve got a solid statement of work with specific criteria, a valid RFP should allow bidders to propose creative ideas you may not have considered but may turn out to be the best solution.
• Be present for all presentations. Never leave the decision to an internal client who may not evaluate the value of the bids like you would. Still, don’t automatically dismiss your internal client’s suggestions, especially if the quality of proposals is subjective. If you disagree with his choice, give sound reasons, not just gut feelings. For example, instead of saying, “This company rubs me the wrong way,” offer a legitimate argument: “I see why you like this vendor, but I’m concerned that as a small firm, it may not last if the economy turns south.”
• Don’t ask to own bidders’ ideas. If you demand ownership of the ideas from every respondent, you’ll discourage participation from some of the most innovative companies. And those that do bid may hold back their best proposals to safeguard their intellectual property. Instead, stipulate your firm will own the ideas only if the business is awarded.
• Leave room for negotiation. Allow yourself to negotiate with RFP finalists, since many will not offer their best bid when submitting an initial response — despite what the RFP issuer may say. They recognize once the business is awarded or finalists are selected, you’ll probably demand some degree of negotiation. Then use effective negotiation skills, which includes setting credible demands to help avoid a stalemate — a “lose-lose” for both sides.
• Get enough bidders. Secure an adequate number of respondents to ensure a healthy selection of capabilities, and then name at least three finalists. If you’ve only got two bidders, you’ll make it too easy for them to assess their balance of power. As a result, they may resist your attempts to negotiate, knowing that it’s probably unnecessary with only one other candidate.
• Give new players a chance. With multiple awards, strive to give at least 20 percent of the business to someone new. If you keep offering similar RFPs to the same firm, unsuccessful bidders may see your company as exploiting them to exert leverage on incumbents.
By following these steps, you’ll significantly streamline your RFP process and attract higher quality bidders that will appreciate your respect for their time and talents. In the end, that will mean better value for you.
For more information, contact Sandy Sbarra at email@example.com or (973) 428-1991.