CREATING AN EFFECTIVE RFP or, If You Absolutely Must Issue an RFP, At Least Do It Properly!

Frequently we find ourselves disappointed with a product or service we’ve received because we either didn’t ask for precisely what we wanted, or we weren't quite sure what to ask for in the first place. If the item at issue is worth only $50, it’s frustrating but not catastrophic. If, however, it’s a $50,000 piece of equipment, built with inferior materials or engineered poorly, it not only represents a significant waste of capital resources - it can also cost you your job.

The Problem with Requests for Proposals (RFPs)
RFPs can be a stroll in the park or a stressful walk on the wild side depending on your approach. To begin with, most organizations making significant expenditures require at least three competitive bids and, while that’s an excellent policy, there are some potential pitfalls to consider:
1. You Don’t Know What You Don’t Know
New materials, advanced manufacturing processes and emerging technologies mean that specs are always changing. But, if you’re not familiar with these new technologies or the benefits and/or limitations of them, how can you be expected to ask for them correctly in your RFP?
Unfortunately, you need to do some homework. Read up on current processes or, if that’s not practical, talk to people you know in the industry, including your current supplier, if that’s possible. Investing extra time up front can help you find the right solution and save you significant dollars.
2. Purchasing Departments: Whose Side Are They On?
The mandate of a Purchasing Department is often to select the most suitable vendor based on predetermined criteria that may include price, similar projects, client references, geographic considerations and any number of other factors. Often, the Purchasing Department will prepare an RFP using only limited information provided by the end user, without clearly understanding the nuances or objectives of the project or application.
Just as everything is not black and white, RFPs should not just be about dollars and cents. If your vendor must be sourced through your Purchasing Department, take the time to meet with Purchasing first to carefully outline your vision and your expectations from the vendor and the product in question.
Another important point - some organizations have the Purchasing Department select the successful vendor based on the established criteria. This might be fine from a policy standpoint but it doesn’t work in real life. You need to be part of the selection process because, at the end of the day, it is you who will have to work with the vendor and deal with any fallout - not the Purchasing Department.
3. Don’t Set Yourself Up For Failure
If you prepare an RFP that contains an outline of the kind of product you are thinking about, you may be doing yourself a disservice. Why not let the proposed vendor recommend what they think is the best solution for you based on your objectives, requirements and budget? Keep in mind that while you may source a significant project or piece of equipment once a year (or less frequently), most reputable vendors have numerous projects in production at all times and can offer suggest solutions that are creative, cost effective and able to meet your objectives.
4. Don’t Play Budget Hide and Seek
Every project has a budget, even if it has some flexibility. If you include a budget figure in your RFP you’ll do yourself and the bidding vendors a huge favor. Without a budget, a vendor may propose a wonderful solution that may be far more costly than you can afford. If you provide a budget however, everyone is working to the same dollar amount. The fact that it’s a competitive bidding process will safeguard you against artificially inflated estimates.
5. You Should Pick The References, Not The Vendor
A vendor is going to provide a listing of clients most pleased with their service. Instead, ask for a client list or at least a good cross section of clients, particularly in your sector. Then, contact organizations of your own choosing.
6. The More You Give, The More You Get
The more information you can include with your RFP, the more likely it is that a vendor will be able to respond with a viable proposal. Vendors aren’t mind readers. Go into detail about the purpose of the equipment you need, its applications and other factors. If it’s a piece of IT hardware, talk about the functionality and flexibility you want. The more you communicate, the greater the understanding.
7. You Get What You Pay For
Don’t ask vendors to submit a concept design with their RFP submission. It’s difficult for anyone to develop a concept for a project that has yet to be fully defined. You should be able to judge a vendor’s capabilities based on their portfolio and by speaking to their clients. And you should expect to pay for good design work. You wouldn’t ask an architect to design a house for you on the understanding that if you like the design you’ll buy it, so why would you ask a vendor the same thing?
8. Request for Information (RFI) Before RFP
Before distributing your RFP, it helps to know as much as possible about your possible vendors. Start out with a Request For Information (RFI) document and send it to as many potential vendors as you wish. In the RFI ask candidates about their corporate history, their experience with projects like the one you’re considering, their ability to deliver in your geographic area within your time frame, their project team and qualifications etc. Based on the responses you receive (or don’t receive), you can make your short list.
Creating the Perfect RFP - In Summary
1. Provide as much information as possible.
2. Make sure to include a budget amount.
3. Work closely with your Purchasing Department.
4. Get references from vendor clients that YOU select.
5. Be involved in the final selection process.

Comments, Questions, Critiques? Contact me at [email protected].