Jan 14, 2010

9 tips for running a considerate procurement RFP process

We've been on both sides of the procurement process and have seen more than our fair share of RFPs. With this background in mind we've put together our top 9 tips for running a more considerate procurement/RFP process.

1. Be upfront with bidders

Creating a winning proposal can cost thousands, even hundreds of thousands, of nonbillable work within a company. If you are issuing a RFP you can never forget that. Being upfront and honest with bidders on your RFPs will save bidders who, upon knowing the full details of your project, might not feel it's right for them, and will save them lots of nonbillable time, effort, and expense.

2. Speak with one voice

When you receive a proposal you expect it to be well-written, concise, and a meaningful response to your RFP. In order to write that meaningful response bidders need a document that clearly articulates the bidding opportunity. RFPs are often times the work of committees, and this fact can be seen mirrored in the RFP document through a mixture of voice, strategies, goals, and definitions. These different voices make reading and comprehension difficult, and can result in a proposal that is just as mixed in its messages.

3. Don't ask for freebies

We've spoken about this before, but asking for free ideas, free designs, free consulting, or free anything is known in the business world as "Spec work". Spec work is a huge disincentive to companies interested in bidding on your project for a number of reasons, many spelled out by AIGA, and can result in top talent making a decision to NOT bid on your project. A better, more considerate practice is to ask for examples of work similar to your own project, or perhaps even consider compensation in the form of stipends for proposals that provide spec work.

4. Receive organizational buy-in

In order to be successful a project needs to have complete organizational buy-in. Nothing sinks a project faster than having the President of the company behind a project, but a Senior VP quietly destroying the project through foot-dragging, poor communication, mixed messages, or outright hostility towards the initiative. Internal teams need to be in harmony before calling for the time and effort of outside firms. This often manifests itself through projects being canceled after proposals have been received because no decisions can be made.

5. Develop your information distribution strategy

"Didn't you get the addendum? We changed the ... last week!" In our last article we spoke about how and where to publicize your RFP; assume your RFP is going to get lots of attention and have a strategy in place for how to respond to everyone equally before you publish your RFP.

6. Research detailed requirements

The more effort, in the form of greater requirements detail, the better the results will be. Not only will responders be able to reply with targeted responses based on the details, but you won't be swamped with inquiries from bidders all asking for the information you neglected to give them. So, instead of scrambling to put together that detailed information in enough time for bidders to respond properly, you can be ahead of the process and provide it to them in the initial RFP.

7. Provide budget information

Stating your budget in a RFP is often a touchy subject. Issuing organizations often think that a RFP is so they can get a product or service for the cheapest price possible through competition. We choose to believe that RFPs are better used as a way to find the best product or service for your actual budget. Look at it this way: if you state your budget and it's below what a company can afford to charge, you won't have to read their proposal (because they won't write one). Companies that would normally deliver for less than your budget still will because they'll try to be the low bidders. And companies that could potentially deliver but might otherwise charge more than your budget might be inclined to discount their pricing.

8. Formulate exit surveys 

One of the tools we'd like to see more procurement departments use is exit surveys. Require a simple registration (name, company, email) in order to gain access to the RFP files. You can use this information in your "information distribution strategy". After the project is completed, go back to that list. Ask the companies about your process, why they did or didn't submit a proposal, what parts were problematic, how they learned about the project, how the process can be improved, etc. Track responses, track distribution, and generate statistics.

9. Organize your communication

You want to make sure that every interested bidder on your project has equal access to all information related to the project, so keeping your communications equal and open is necessary. If you provide an answer to one bidder you should make both the question and the answer available to everyone at the same time through the use of addendum published along with the RFP. And no matter what, don't send out an email to all of the bidders with their email addresses in the To: or CC: fields; that is exactly what the BCC: field is for!


In conclusion

Please remember the time and nonbillable investment that bidders put into every proposal. Treat this time and effort as a responsibility on your part to run a fair and considerate procurement process. Not only will you find the right partner for your project, but you'll also earn the respect of the bidders. And while not one of the 9 tips, don't forget to contact everyone that submitted a proposal to you and thank them for their time.

For more on the subject please read a previous article entitled "RFP Etiquette: Dos and Don'ts for Business Matchmaking", my interview with Vince Giorgi of Touch Point City.


Need help running a considerate RFP process for your company or organization?