Management
Key Concepts to Writing an Effective Request for Proposal
An effective request for proposal can streamline the solicitation process and ensure a positive start to an important project.
Missi Labbe
In every industry the request for proposal (RFP) is an important tool for soliciting competitive pricing for equipment and services. Whether you are a town purchasing compaction equipment for a transfer station, a city soliciting curbside collection services, a landfill operator looking to expand into a new cell or a recycling facility considering making the change to single sort processing, the process is very much the same. The perfect RFP has yet to be written. Often when writing an RFP, companies will use a copy of another company’s RFP as a reference or as a starting point for their own. In doing so, we find that the same deficiencies are often repeated. Here are a few key factors to consider when writing an effective request for proposal.
Knowledge is Key
In public speaking they say to talk about what you know. The author of an RFP should posses a functional technical knowledge of the full scope of the project for which he is writing the RFP. This does not mean that the author must be an expert; however, it is important to understand the project from a technical level. For example, a person without a license to drive probably would not be the best person to go out and purchase a new car.
Imagine writing an RFP for compaction equipment for a transfer station in Maine and not understanding the function of an oil heater. If you don’t know what it is, how would you ever think to ask for it? Finding out the purpose of this equipment during installation could prove expensive due to unanticipated time delays and unexpected equipment costs. The author should have an in-depth knowledge on the subject or coauthor with someone who does. This ensures that the appropriate questions are asked. An owner, engineer or consultant can be a valuable source of technical knowledge to ensure the project proceeds smoothly. This knowledge will also be essential in the evaluation of submitted proposals.
Provide Detailed Supplemental Information
Vendors must weigh the potential opportunity against the cost of compiling all information necessary to formulate a competitive proposal in response to a request. If the vendor perceives a costly process to collect necessary information, they may think twice about submitting a proposal and thus potentially limiting competition on your project. For this reason, it is recommended that consideration be given to the process which the vendor will need to employ in order to calculate a competitive proposal.
Envision writing a request for curbside municipal solid waste collection but not providing a city map or a list of city roads to be served. By making available all the tools necessary for the vendor to provide a comprehensive proposal, you ensure a proposal that addresses all specifications at a price that is as precise as can be estimated. A vague request can lead to a padded bid to cover the unknown costs the vendor may perceive are there.
Avoid Including Contract Terms in a Request for Proposal
An RFP should spell out all the facts and requirements that are material to the calculation of cost of services. Many RFPs seek to spell out details best left to the actual contract. Although some details are important to state in order to allow the successful bidder to properly quote costs, such as performance bond requirements, remember that the contract lays out the terms and creates the duty to perform. The request for proposal is meant to provide enough information in order to receive offers of goods or services from potential vendors for precisely the product the customer requires. Creating a RFP that combines contract terms and specifications can sometimes create confusion resulting in key information being overlooked and can create a perception that the proposal process is excessive and therefore costly causing vendors to decline to submit a proposal. Consider carefully what information will impact the vendor’s ability to complete the project. Evaluate the services that are customarily provided as part of the normal performance of daily operations in similar circumstance. Detail only those special or custom requests that will impact costs. For example, billing and payment terms may not be required to be spelled out in the request unless they are significantly outside industry standard terms.
No One Likes Addendums
Addendums are the supplemental information provided after the initial request for proposal publication because the vendor or author has recognized the need for additional information and/or clarification. Addendums are disruptions in the already tight timeline and should be avoided by careful planning and consideration prior to sending out the request for proposal. A rush to publish a RFP will inevitably lead to the need for one or more addendums.
Don’t Make a Request Unless Prepared To Award a Contract
Much to the perturbation of vendors, too often, requests for proposals are sent out to solicit pricing with little to no intent to award a contract for services at the end of the process. As companies or municipalities conceptualize future projects, pricing is sometimes needed to evaluate the potential viability of new opportunities. The challenge to vendors is assessing the true intent of these solicitations for information. Constructing a comprehensive proposal can be costly and time consuming. The larger the project the more investment in time and resources is required on the part of vendors. In situations where information is all that is needed and the project is not immanent, a request for tentative pricing may be a fairer process. Various vendors will willingly discuss pricing proposed on similar projects and relevant costs for planning purposes. When vendors experience an RFP process that arbitrarily ends in un-awarded contracts, they are less likely to participate in future requests from the same source.
Ask the Experts
One of the most valuable services a vendor can provide may be the benefit of his professional opinion. It can be beneficial to share a draft request for proposals with potential vendors and solicit feedback prior to the official request. This can often provide valuable insight into details and concerns vendors may put forward. An example might be the suggested use of industry terms that might better convey the desired result or a specific request for information that may highlight potential deficiencies and/or notable qualifications identifiable between vendors. Vendors are professionals in their respective fields and often times can recommend variations based on their experience or knowledge of innovations. Most vendors will gladly review and comment on a request for proposal prior to its official submittal.
Provide For a Reasonable Response Time
Vendors’ number one complaint is that companies requesting proposals do not allow enough time for adequate response. Don’t make the mistake of assuming that if the vendor wants the business they will responds according to your timeline. In today’s economy companies are doing more with less and staffing is no exception. Yours may not be the only project that crosses their desk that week. Providing a reasonable amount of time for response ensures that vendors may carry out a comprehensive review of your project, while balancing other projects in various stages of completion, and still maintain the ability to formulate a competitive response to your request.
Ultimately, the goal of the request for proposal is to cultivate competition and ensure that all parties clearly understand the end product or anticipated result, in detail, to achieve the best possible price and outcome for the opportunity at hand. An effective request for proposal can streamline this process and ensure a positive start to an important project.
Missi Labbe is the Program Development Manager for ecomaine (Portland, ME) a quasi-municipal non-profit waste management company owned and operated by 21 municipalities in Southern Maine. Missi has worked with ecomaine since 2001 and is responsible for developing, marketing and managing new waste management and recycling programs at ecomaine’s waste to energy and single sort recycling facilities. As Program Development Manager, Missi works closely with member municipalities to provide innovative services and resources to effectively manage municipal solid waste for more than 24 percent of Maine’s population. Missi can be reached at (207) 773-1738 or e-mail [email protected].