Procurement
May 14, 2012

Better proposals mean better choice

Once upon a time, the King was looking for a really cool systems solution to improve the kingdom’s energy efficiency. He wanted to make sure that whatever solution was chosen was the best fit. So he held a ball and invited all the possible applicants he could think of to bring their proposals. The RFP invitation explained what the kingdom was looking for, what the rules were and a bit of extra information about the kingdom’s current systems.
 
Unfortunately, the invitation did not provide enough information and parts of it were written in the formal and ancient legal language of the kingdom. As such, many potential applicants decided not to even try and when the date of the ball finally came, the King was presented with only a handful of applicants: rusty old knights who themselves only sort of understood the ancient language and only kind of hit the target.
 
We all know how the story ended. The King was stuck with only three proposals which all scored between 50 to 60 out of 100 points. Barely adequate, mediocre and not what he was looking for at all. However, because the kingdom was bound by the formal rules of the invitation, he had to choose one. As a result, he spent many subsequent years trying to “fix” the offering with numerous change orders which, in the end, cost the kingdom dearly and did not really improve energy efficiency that much.

The moral of the story: it is important to look at improving vendor communication in the RFP so that you get more applicants and better proposals rather than awarding a contract that you augment later with extra money you don’t have. Better proposals equal better choice and better value for your stakeholders.

Barriers to the ball
 North American vendors have a common set of concerns: they don’t understand and are often intimidated by the procurement process, they wonder whether the process is truly open, and they believe that governments hide critical information or at least make it difficult to obtain.

There is a barrier to getting a reasonable number of excellent proposals from qualified vendors: the RFP.

RFPs are supposed to satisfy four distinct objectives:

  • Define a problem that requires vendor expertise to develop an appropriate solution;
  • Establish legally proper rules for a competition, as defined by the Supreme Court;
  • Provide information such that a qualified vendor, based only on the information contained in the RFP, is capable of generating a winning proposal; and
  • Encourage suitably qualified vendors to submit proposals capable of solving the problem.

It is difficult to satisfy all four of these objectives. Most RFPs do a decent job of defining the problem and the RFP rules. They do an adequate, but not outstanding job with objective three, transmitting information, and they do a poor job on the last one related to helping vendors. In addition, it is almost impossible to deal with these four objectives and still have a friendly, easy to read, easy to understand RFP.

The biggest problem with vendor communication involves trust. Because RFPs are often badly organized and wrought with as much formal language as possible, many vendors don’t believe that the process will be fair or that they have a chance of succeeding.  

First, review your RFP documents and identify ways to make them better organized, clearer and easy to read. Second, build trust with vendors by being upfront and forthright about their common concerns.

Getting to happily ever after
Getting better proposals is critical no matter whether you’re trying to run a kingdom or a government.  Vendors want to come to the ball but need your help. Yes, we are busy and there are many reasons why we don’t take the time to make our RFP documents and processes easier for vendors.

Yes, some vendors are easier to deal with than others because they sort of “get” your process and it’s easier ignoring those who don’t “get it.” That’s only true, however, if you take the short view. The longer view is that our kingdoms will suffer if we don’t improve our communication with vendors.

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