In past articles on requests for proposals (RFPs), we’ve discussed the team, the process, and the reasons why RFPs work. It’s just as important to consider what is included in the actual RFP document. With that in mind, here are the five elements of an optimal RFP.
1. Clear Directions, with a Single Point of Contact
As consultants, we receive RFPs from companies looking for assistance. Sometimes, the instructions are difficult to decipher, and I’m not sure whether or not to respond. To add to the confusion, the RFP contains different names in different sections, making it unclear who to contact with questions.
The RFP should provide clear instructions on how to complete the paperwork – or the online platform being used. Explain what formats are acceptable for submitting answers, including document type (e.g., Word, Excel, etc.). If using an online platform, like Ariba, provide instructions on how to complete the sign-up and logon processes.
Most importantly, provide a single point of contact for all questions, with both email and phone number. Whenever possible, the contact should be someone from purchasing or procurement. This ensures consistency of answers to any vendor questions. If a vendor raises an important point that needs clarification, the contact will make sure that every vendor receives the information.
More importantly, it stops unwelcome interruptions for the operations manager, allowing them to focus on production.
2. Distinct Sections for Each Subject
For most companies, there are several departments that have input on any purchase. That includes purchasing/procurement, information technology (IT), facilities, and operations. And if the solution involves sharing data externally – whether through a cloud-based application or remote access – then IT security will definitely have concerns.
There should be separate sections for each of these subjects. If using a Word document, then insert a page break between sections, with the heading of the section in a bold font. If using an Excel workbook, create a separate sheet for each section, with the name of the section on the tab and the first line of the spreadsheet. Most online systems will also allow you to create distinct breaks as well.
This will make it easier for the vendors to respond, and for the buyers to grade. Most vendors have teams that respond to RFPs. They are experts in finance, systems, and functionality. The RFP can be easily broken out, distributed, and then reassembled for submission.
Similarly, the company soliciting bids can share the specific responses to the appropriate team members to grade. People in the business unit are not qualified to determine what standards are acceptable for the IT systems and security. Likewise, procurement may not understand which functions and capabilities are most important to the production unit.
3. Provide Answers to All Vendor Questions, to All Vendors
As an operations manager and a consultant, I’ve worked with some of the best procurement teams in the industry. They’re diligent in drafting RFPs that accurately describe the products, software, or services that the customer is trying to buy. The RFP is reviewed by multiple teams multiple times before being published.
Vendors will still have questions.
That’s a good thing, as questions demonstrate that the vendors are attempting to create the best response possible. With further clarification, they will be able to offer the appropriate solution to meet the customer’s needs. Precision is important.
After answers are drafted, share the responses with all the vendors. This is important for two reasons – opportunity and transparency. The answer to one vendor may spark ideas for the other vendors. That means greater opportunity to receive multiple solutions to the challenge.
Every vendor receiving the same information is essential to ensure a fair and equitable administration of the purchase. Transparency in the RFP process is a hallmark of honesty and objectivity. An open process is even more important for public companies and organizations in the public eye.
4. Standard Format for All Responses
An important aspect of good RFPs is that they allow the team to fairly compare the responses. Not only on price, but on the characteristics of the proposed solutions. That means the responses have to be in the same format.
Many companies use online tools, like Ariba or Coupa, to manage their RFPs. In most cases, these systems require vendors to complete certain fields when responding. However, some vendors will attempt to circumvent the process by attaching complex PDFs. The same problem can occur with companies using spreadsheets to collect responses.
Vendors should be allowed to attach documents for clarification. But they must be required to complete the RFP documents in the manner proscribed. This is especially true for the pricing section. Otherwise, the RFP team may not be able to make logical comparisons and decisions.
The instructions for the RFP should make it clear that the answers must be in the proper format, or that they will not be accepted. Structure is most important in the pricing section – per piece costs, leasing costs, and service fees should be submitted in the same format by every vendor.
5. Alternative Vendor Solutions as Attachments
After reading the RFP, vendors may see an alternative that the company hasn’t requested. For example, a company may request bids for a software with certain functionality. One of the vendors may also have software that approaches the challenge differently, but with similar end results.
The vendor should be given the opportunity to propose an alternative solution – as an appendix or other type of attachment. That is, the vendor still responds to the RFP per the instructions, and then adds the new solution in a separate document. This allows the company to compare the requested bids and consider new ways of achieving their goals.
RFPs take teamwork, time, and commitment to ensure that companies select the best solutions – whether it is software, hardware, or services. Taking the steps to draft an optimal RFP is a key element of a successful RFP process.
Mark Fallon is President of The Berkshire Company. Visit www.berkshire-company.com for more information.
This article originally appeared in the September/October, 2023 issue of Mailing Systems Technology.