NAVIGATING PREFERRED VENDOR STATUS

The Request for Proposal

“You are our preferred vendor on this project,” the facility manger assured the architect at the start of their videochat.

The architect knew better than to ask whether this meant the facility manager was not soliciting proposals from other architectural firms.? He did not want to put this longtime client in an uncomfortable position, knowing the truth was either:

• His firm was the preferred vendor but they needed to have three qualified bids per their purchasing department’s requirements.
• There were no other bids being sought, but telling him might result in his firm bidding a little higher than if there were competitors.
• The facility manger was planning to stretch the rules by sole-sourcing these design services, but didn’t want to let him know in fear the word might be spread that she did that.
• She was telling all the firms she contacted that they were the “preferred vendor.”

His experience also taught him that he must approach his response to any proposal solicitation as if there were competitors, regardless of what was stated or implied.

The request for proposal was very detailed relative to the scope of work, project budget and desired timeline.? Little information was being requested about his firm, their expertise and experience.? Of course, the facility manger already knew much about the practice from over a dozen projects in the last five years.? Would her assurances about his firm’s qualifications be enough to satisfy whoever had the final decision on approving what the architect anticipated to be a six figure contract?

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Understanding the Contract Award Process

His next question addressed this concern.? “Who will make the final decision on the contract and on what basis will they decide?”

The facility manager started to answer the question, stopped herself, then shrugged her shoulders and replied.? “Funny, no one has asked me that question before.? My boss, the VP of Administration must approve the award, but he’s usually a rubber stamp if the proposal is within 10% of my approved budget.? He’s an IT guy and facilities is not really his thing.? Then the paperwork goes to Purchasing, where they typically run a D&B and credit check on the proposed firm to be selected.? Then it will be required to have the signoff of the Director of Purchasing if it’s over $100,000, and the VP/GM’s blessing if it’s over $250,000.”

From this peek inside the procedures of his client, the architect now had some valuable information:

• The facility manager had a professional design services budget already approved, so he needed to be within 10% of that.
• Her boss was making no competency judgment on the architectural firm.
• Her tone suggested that this was definitely going to be reviewed by the Director of Purchasing, so she is expecting a fee over $100,000.
• If he kept the fee under $250,000, the facility manager was saved from having the VP/GM review the proposal.

This still did not let him know if he had competition.? He expected that contracts above a certain value needed to be competitively bid.? That was also not a question he wanted to ask.? His further inquiries revealed that the Director of Purchasing was new at the position, so likely would not be familiar with his firm’s past record with this company.? The design services proposal narrative must assume that the reader is unaware of their experience and qualifications.

His final question was a risk in wanting to know too much about his client’s internal processes, but he felt confident that if he was out of line, she’d rebuff his query with a mild decline that it doesn’t hurt to ask.? “When you forward our proposal along for approval, is there any kind of form you fill out, or summary or slide you prepare that we could suggest what you might include?”

She rolled her eyes at the thought of that paperwork, not relishing that requirement of her job.? In a minute his inbox signaled a new email.? “I sent the form, narrative and slide I prepared for your last project with us.? Since it’s about your firm, there’s nothing confidential there.”

This was much more than the architect expected, and he was profuse in his gratitude.

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Empowering the Client to Set the Fee

The proposal delivered two weeks later included tabbed appendices that introduced his firm, the key players and related experience for any person not as familiar with firm as the faculty manager.? Also provided were the drafts of the form, summary and slides for her use.? However, the major impact from their initial conversation on the proposal was on how he structured the fees.? The total lump sum fees to cover the project from kickoff to occupancy did exceed $250,000.? While he could not know her fee budget, he presented the fees in a way that might help her navigate the approval process:

• Each phase of the project was presented at a fee of under $100,000.? This would provide the facility manager the option of approving this project a phase at a time, not requiring Purchasing Director approval, or at least for the first phase.
• Nowhere in the proposal was there a fee amount shown that exceeded $250,000.
• A number of add alternates covering additional services were identified, none of which were crucial to complete this project.? All those services were eventually requested and provided on past projects, but did not appear in this RFP.? Significantly, the total sum of the crucial activities did not exceed $250,000.? These additional services included such items as 3D renderings, LEED certification and compiling operations manuals.
• There were also a few suggested deduct alternates, mostly associated with the number of meetings and site visits that were listed in the requested scope of services.? Hopefully, along with the add alternates, these would offer the facility manager the ability to tailor the fee to be within 10% of her budget.

In his discussion about this approach in reviewing the proposal with the architectural firm’s managing partner, they agreed that this was also providing their client proprietary information with a window on how they priced their services.? This seemed to be a fair trade for the facility manager’s openness about their purchasing process.? It might also assist her in developing future RFPs for these services.? They then discussed how their business relationship could possibly evolve to a level where the architect could partner with the facility manger in creating a design fee as well as an overall project budget, packaging the services that the facility manager truly needed and to recognize the approval process and how project contracting might be expedited.

A few days later the facility manager called the architect to advise him of the award approval.? While she deflected his inquiries now about whether there was any competition for the contract, she happily noted that the new purchasing director remarked how easy must be for her to work with this architectural firm.? She still needed to meet with the architect next week to sort out which add and deduct alternates to accept, but meanwhile he would be receiving later that day a purchase order to cover the schematic design phase and an authorization to proceed.