Score RFPs Before Submitting Your Intent to Respond

We’ve already discussed whether clients should bother issuing RFPs, but today we’re focusing on whether vendors should bother to bid. More often than not, the right answer is to politely decline. There exist plenty of vendor companies dominated by salespeople who are inextricably married to, even enamored of, RFPs. We encountered one organization whose senior leaders openly boasted, “We never met an RFP we didn’t like.” That attitude led to abysmal results, wasted time, and squandered opportunities. By bidding on any RFP distributed, regardless of feasibility or strategic alignment, the higher value bids often wither and die in the chaos of the unprioritized traffic. With this degree of dilution, every bid becomes a loser.

Before you fire off an executed Intent to Respond, score the offer. If you don’t have an existing relationship with a prospect, you can bet the RFP process has not been undertaken to seek new ideas or innovations; it’s there to determine reasons for rejecting you. Before you spend all that time, effort, and money preparing an onerous proposal response, with the odds stacked against you, score the bid and disqualify yourself if need be.

We have created countless scoring sheets, filled with lots of numbers and percentages and lengthy formulas. They’re effective but complicated. Depending on the RFPs your firm typically receives, a simple, direct, common sense approach might do the trick. So feel free to download our no-nonsense scoring sheet in the Resources section. Or go directly to the RFx Scoring Sheet. After accessing the spreadsheet, select File > Download As > and choose XLSX for Excel. If you’d prefer your own copy in the native Google Docs format, request it using the Contact form. Don’t worry, it doesn’t cost anything.

If you’d like us to design a custom calculator for your business, one with all those fancy equations and moving parts, we’d be happy to oblige.

2014. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

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Wired Bids and Red Flags

RFPs are supposed to be impartial. That doesn’t mean they are. Have you ever responded to a bizarre, seemingly impossible RFP and had that “something is rotten in the state of Denmark” epiphany? Your gut may really be raising the alarm. To be fair, some poorly conceived RFPs result from the inexperience of the procurement groups issuing them. You will encounter, however, what we call “wired bids” -- documents constructed to ensure that a favored bidder, with ties and deep insight to the client, will win. There are times when hiring managers, procurement professionals, and HR leaders have identified preferred vendors but are forced to undertake the RFP process by their superiors. Usually, because the decision makers want to select an outsourcing partner based on merit, experience, past performance, and quality. I tend to agree. Still, professional friendships and allegiances can create complex emotional dilemmas for some people.

If you’re responding to a wired bid, you need to identify the red flags and recommend declining participation in the event. Scoring bids prior to beginning the response process is mission critical, and we’ll explore that topic in future articles. Heck, we’ll even help you score them or provide custom scoring sheets for use in your organization. If you ask nicely.

If you’re the person who just distributed a wired RFP to a pool of vendors you have no intention of considering, shame on you. Without realizing it, you could be causing your company irreparable public relations damage with vendors that may be needed later in life. And industry firms talk a lot. Gossip spreads quickly. Understand that your tactic might not be as stealthy as you think. Last year, I helped a company faced with a blatantly wired bid. All but a single bidder dropped out of the process. And when that procurement person’s superiors demanded to know why all but one staffing provider refused to respond, she was dropped as well.

Following is a brief list of red flags that may indicate wired bids. For proposal teams, pay close attention to these criteria when deliberating on your decision to participate. For offerors, know that a lot of proposal teams will recognize these warning signs. And that could come back to haunt you.

Red Flags

• Overemphasis on the relevance of experience, such as an RFP comprised almost entirely of case studies and responses to abstruse scenarios.
• Emphasis on criteria that are easy to bias.
• Prohibitions against contracting or rehiring incumbent staff.
• Overemphasis on key members of the vendor’s staff, with an unusually large number of questions focused on biographies and resumes, along with atypically high weighting in the evaluation.
• Evaluation practices reaching outside the norm for similar clients. For example, pricing is typically evaluated at 40 percent, but for this RFP it’s around 10 percent.
• Using multiple evaluation criteria to address the same thing. For example, requiring that past performance projects include resumes for the staff being bid when resumes have been requested elsewhere in the RFP. Staff qualifications are now being counted twice, making this particular element disproportionately heavy in the scoring.
• Short, inflexible deadlines. Only a bidder with pre-existing knowledge and intimacy with the client could effectively respond in the timeframe slated.
• Ambiguity that favors an incumbent. For example, requiring a vendor to supply custom software without divulging the parameters and needs to be addressed. Also look for undefined scopes of work and deliverables that are named but not described. Other examples include Statements of Work that require knowledge of the client’s Standard Operating Procedures (SOPs), set aside mandates, and processes.
• So much detail, the RFP overwhelms.
• Redundancy -- the same question is asked repeatedly, verbatim.
• Page limitations that make it impossible to respond to all requirements. Only a preferred bidder could know what to focus on and what to skip without being branded noncompliant.
• Fixed price proposals that provide insufficient information about program spend, volumes, the time needed to implement, etc.
• Unusually brief responses to bidder questions, especially when only a handful of vendors have been invited to the RFP.
• No responses to bidder questions that offerors could easily have answered.
• Unusually lengthy answers to bidder questions delivered past the promised date, without an extension to the RFP.
• “Processes” specified in the RFP that can’t be mapped or charted -- only a vendor with insight and experience could figure them out.

2014. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

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Answer Direct Questions Directly

If you’re a proposal writer responding to an RFP, here is a surefire way to ruin what might have been a decent proposal: never, and I mean never, answer a direct question directly. When used properly, an RFP provokes thought, careful planning, innovation, and a solid basis for further discovery. Unfortunately, proposals are also driven by long and meticulous narrative. The offeror wants a thorough response, but brevity remains tantamount to success.

If you can’t focus on core points and deliver as concise an answer as possible, you’ll lose the attention (and interest) of the evaluation team. To avoid screwing up a proposal, don’t pack meaningless marketing fluff and filler content into your answers. Don’t talk in circles that never actually answer the question. This is the most efficient and straightforward path to failure. This practice may also create the perception in the offeror’s mind that you can’t provide the services requested or are lying.

Here are two recurring examples.

Scenario 1
Question: List the criteria used to evaluate the performance/success of your teams.

The Perfect Wrong Answer: Although program and team member performance is effectively determined by agreed upon service levels, metrics, and other key performance indicators (KPIs), teams are ultimately measured by client satisfaction.

This is the perfect non-answer. What does it mean? It never specifically addresses the question, nor does it provide even a brief, clean list of bullet points to highlight the usual metrics one would expect. It also implies you have no interest in or tools with which to measure your resources. You’ve just placed the onus on the client when the whole point of outsourcing is to ease those burdens. And nothing says “our company has never really done this before and has no idea what you expect from us” better than this response.

Scenario 2
Question: Client requires strategic business reviews quarterly. Do you agree to these terms (Y/N).

The Perfect Wrong Answer: Anything other than “Yes” or “No.”

The quarterly review is a client requirement. Will you comply? Yes or No? There’s nothing more to say. If offerors want details on the structure, content, and topics covered during these reviews, they’ll ask separately-- probably in the next question. If not, don’t presume.

Should you encounter any ambiguities or confusion with questions in the RFP, it’s your responsibility as the proposal professional to address and resolve them during the Question and Answer period.

2014. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

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Quid Pro Quo: Sharing Information in Your RFP

“If I help you, Clarice, it will be turns with us too. Quid pro quo. I tell you things, you tell me things… Quid pro quo. Yes or no?”

Taken in the very confined context of this scene from “Silence of the Lambs,” the relationship between a serial killer and a fledgling FBI agent strikes me as less dysfunctional and more productive, more honest, than many vendor-client engagements during the RFP stage. Here, Doctor Lecter represents the vendor. You, the offeror, play Agent Starling. See, this is your case, tasked to you by superiors in the agency. They recognize your potential to evolve and succeed, to climb their ladder. And you hold most of the cards here; it’s your case to lose. You also have resources and freedom -- something Lecter does not. But the doctor does have something you really need: expertise, insight, the ability to guide you down the winning path. It’s his only trump card.

If you’re not willing to be honest with him and share, he has no reason to reciprocate. He’s not going anywhere. The urgency is not his. If Agent Starling walks away, she stands to lose more than Doctor Lecter’s attention.

Your RFP was issued to address a pressing business need. Those pain points torment you, not the vendor -- just as Clarice Starling’s imperative to locate and capture a dangerous predator have little bearing on Hannibal Lecter. He will respond only because he believes he can improve his own situation by helping her. But she possesses scant leverage with which to influence him, other than to make a case for mutual cooperation that’s compelling enough to gain his participation and invest in her cause. And in order to help, Doctor Lecter has simply asked her to share information. Your interaction with vendors at this point is really no different. When bidders open your RFP, they must understand the background and the mutual benefits immediately.

It is here, in the preamble or executive summary of your RFP, where you make or break the deal with the Lecters out there. The only way to achieve your end goal is through transparency, reciprocity, and sharing program data, uncomfortable though that may be. This can’t be unilateral. The exchange must be quid pro quo. Otherwise, the rest of your RFP is meaningless.

When you issue your request, make sure to include all relevant program details in your synopsis to bidders. As previously discussed, you should have received executed NDAs back from the vendors you invited to participate. So no worries, right?

Here’s why disclosure and transparency matter: vendors cannot create account team structures, staffing plans, implementation schedules, solution designs, and competitive (or even ballpark) pricing without knowing your spend, volumes, locations, worker categories, and so on. If you withhold this information, you prevent proposal teams from doing their jobs. The bids you’ll receive back will be hundreds of pages of guesses. You will be disappointed. Your superiors will be disappointed. Vendors will quickly lose interest in your organization.

Also understand that the more forthcoming you can be with crucial details, the fewer vendor questions you’ll have to answer. You just spent weeks writing an RFP. Do you really want to pull another late night responding to requests for clarification? To avoid this nightmare, be sure to summarize, at minimum, the following details. Make them prominent. Include them in the first pages of the document. It’s not so much a matter of whetting appetites as it is giving vendors a reason to engage.

• Total program spend
• Spend by job category
• Job categories you need filled, even if they’re not covered in your existing program
• Spend and worker volume by location
• All locations truly in scope for the program -- not what you think might be covered in some indeterminate future or are adding to entice participation
• Outlying spend (in scope, nobody wants to bother with business they can’t touch): SOW/project-based contractors, non-billed workers, independent contractors/freelancer, et al.
• The number of suppliers currently providing services and the number needed (i.e., augmentation or rationalization)
• Whether or not you have incumbents, especially those who shall remain engaged
• Your real pain points, the actual drivers of this request
• The decision makers and executive sponsors for the program
• Specific legal, regulatory, or compliance considerations a successful vendor must meet
• The projected start date for implementation
• What kind of program you want and need: Master Vendor, MSP, Vendor Neutral, Hybrid, etc.
• Whether third-party tools will be used or have been previously chosen
• Integration or interface requirements are needed between those tools and your existing systems
• Communication protocols during the RFP process: who to contact, deadlines for questions, a date at which point the process “goes silent,” etc.

2014. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

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Requesting Financials: Make Them Show You the Money

Success in the staffing industry is largely a numbers game. The retail security industry is quite similar. When crime plummets and peace of mind flourishes, alarm sales wane. After a major event, one that instills panic or the fear of compromised safety, alarm sales soar. Staffing isn’t much different. The profits of outsourced staffing providers are intrinsically tied to the fluctuations of the market. Their livelihoods depend on the prevailing human capital needs of the moment, as influenced by economic conditions...particularly those of their prospective clients. These conditions, however, are highly dynamic. What’s the point? The financial stability and foreseeable solvency of your would-be vendors, that’s what.

On January 8, 2008, the business world awoke to the shock of learning that Axium International, the entertainment industry’s largest payrolling services provider and parent company to Ensemble Chimes, closed up shop.

For the entertainment industry, Axium’s closure left hundreds of workers stranded without pay. Several Axium clients told the Los Angeles Times that prior to the announcement they were required to deposit a percentage of their payroll amounts to Axium for processing. Many Fortune 500 companies relied on Ensemble Chimes to supply their contingent workforce. According to estimates, Ensemble Chimes provided more than 2,000 workers for non-entertainment industry companies. It shuttered its operations owing millions of dollars to staffing firms.

A year later, hardships facing the U.S. economy caused another VMS provider to announce its closure. On January 19, 2009, Vendtegrity shut down and executed a “general assignment for the benefit of creditors.” Total debt in this case was more than $1 million, and 99 percent of the creditors were staffing firms.

Your outsourced labor program will work only if the vendors you select remain profitable. That’s the incentive. So on one hand, if you want to maintain a productive vendor-client relationship, you must commit to making the service provider’s efforts worthwhile. But more importantly, you need to ensure that the vendor will be around long enough to meet your needs and fulfill its promises.

Asking for financials in an RFP is fairly common. And those questions deserve to be asked. But ask wisely.

If the vendors you’re courting are publicly traded companies, receiving accurate financial information is easy. Sarbanes Oxley enforces a level of fiscal transparency that makes validating the vendor’s stability a simple process for your team. But a good number of staffing firms, RPOs, MSPs, and VMS providers are privately held corporations. Best practices would recommend that private companies operate as though under the rules of SOX. But you can bet not all of those organizations do. Here are strategies for drafting the financial section of your RFP.

DO send out mutual NDAs to all prospects prior to releasing the RFP. Mutual NDAs protect your interests and those of your bidders. An NDA also removes any objections a privately held vendor may concoct to justify withholding information you need.

DO NOT issue unilateral NDAs. Honestly, you’ll come off crooked, and savvy vendors may just walk away. I wouldn’t blame them. You could be losing out on partnering with an intelligent, ethical, and risk-averse vendor. Also be aware that vendors who eagerly execute such agreements are desperate for business. Under no circumstances should you sacrifice any aspect of your program for a desperate vendor, even when that firm undercuts the pricing of all other bidders. It’s a relationship doomed to fail and end quickly. But you’ll be the one playing janitor with the mess.

DO mandate that vendors send you copies, audited or otherwise, of their three most recent years of financial statements. You have finance and accounting teams at your office. They are experts. Let them review the documents and make informed determinations about a vendor’s financial health.

DO NOT provide a table for vendors to populate with data from their balance sheets, in lieu of financials. You’re essentially asking them to self-certify their information. Don’t. Err on the side of caution. You have no business reason for believing anything they tell you without supporting evidence. That’s why you’re using an RFP instead of a sales meeting, right?

DO NOT require vendors to send financials and then ask them to fill out a table requesting the same exact information. We see this all the time when responding to RFPs. It’s redundant busy work. There’s no reason to do this. Just request a copy of the financials and scrutinize the figures.

DO NOT ask a series of fluffy questions about finances. Again, just review the documents the vendor submits. Time and again, we encounter bizarre questions that beg for narratives. It’s largely unnecessary and can’t be validated.

DO ask brief and pointed questions about the following: whether the company has filed for bankruptcy (demand explanations for positive responses and bind vendors with penalties for failures to disclose situations you might uncover later); whether the company is involved in any mergers, acquisitions, or divestitures; whether the company has any legal issues you should be aware of (demand explanations for positive responses and bind vendors with penalties for failures to disclose situations you might uncover later); whether the company has escrow, credit, or trust accounts established to ensure vendor payments should financial problems arise; and get a copy of the company’s contingency plans related to the discontinuation of its operations. Demand to see some real data to support every response in this section of your RFP.

Even private companies have financials, business continuity plans, exit strategies, etc. If they don’t, you’ve already pierced their corporate veils. Avoid such “companies.”

If a privately held vendor refuses to submit financials or basic documentation that should exist for any incorporated entity, disqualify the proposal. Don’t entertain or further consider non-answers such as “We don’t typically release this information in this stage of the relationship,” or “As a privately held company, we don’t disclose our financials.” Waste no more of your time on these people. If they have something to hide, you can’t trust them as business partners. Putting sour milk in the fridge won’t make it taste any fresher a week later. File the bid away and move on to the next one.

2014. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

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Should You Issue an RFP for This Project?

To RFP or Not to RFP, That is the Question (Too Seldom Asked)

The RFP process can be time-consuming and expensive. Drafting, distributing, reviewing, scoring, and evaluating responses requires the attention of numerous company resources. Those commitments cost money. And your pain doesn’t end after awarding the work to a successful bidder. New team members must then get involved to negotiate the contract terms, assist with implementation and deployment, set up billing and invoicing protocols, facilitate training, perform User Acceptance Testing (UAT), oversee compliance with established Key Performance Indicators (KPIs), track delivery on Service Level Agreements (SLAs), and so forth.

When to Forgo the RFP

RFPs should be used when a project is sufficiently complex, requires a great deal of technical information, solicits hard data for analysis and comparison, and thereby warrants a formal proposal from a supplier. Oh yeah, they should also be used only when you really need to compare responses and vendors objectively. Don’t send out an RFP because you think it’s easier or the “right thing to do for appearances” or “good form.” If you know beyond reasonable doubt which vendor(s) you’re likely to select from the onset, don’t run everyone else through your gauntlet. In this case, invite your identified prospects to present their solutions.

By way of example, if you are trying to decide between two known and previously identified Master Vendors, a Vendor Neutral MSP, and you also desire a Vendor Management System (VMS), schedule these folks to demonstrate their capabilities in a presentation. See how well the technology partners play with the service providers, if applicable. Assess how each vendor tailors its solutions to your specific objectives and culture. The meeting can be online or in person, but never rely on a conference call. You need some form of visibility -- a means by which to scrutinize the interpersonal interactions. Gauge the body language and confidence of the presenters, especially in response to questions. A video hangout is perfectly acceptable, but you need to judge vendors by more than their words.

After that, invite a formal proposal for a bid. We call that a Request for Quote (RFQ). And honestly, that’s all an RFQ should be. Don’t stuff it with RFP questions. We’re not going down that road in this instance, remember? We’re talking pricing here. You’ve seen everything else you need to see.

When to Use RFPs

Epiq’s Glenn Wheaton contributes this insight:

“RFPs are helpful when supplier creativity and innovative approaches to problems are needed. It is important to remember that the RFP process can take a significant amount of time to complete and could result in delays to the start of the project. Therefore, it only makes sense to use this when the benefits from obtaining supplier proposals are greater than the extra time it takes to prepare the RFP and to manage the RFP process.”

When the project and the anticipated sales cycle take on complexities that extend beyond the scope of a traditional “let’s do lunch” approach, the RFP process makes a good deal of sense. With a proposal, you receive enhanced visibility into the bidder’s key offerings and core competencies, relatively firm pricing models, comprehensive answers to crucial questions, and a robust document that lends itself to more in-depth analysis by your stakeholders. Always approach the RFP’s creation with the intent of including its content as an appendix to a Master Services Agreement (MSA) or Statement of Work (SOW). You should never allow bidders to self-certify their claims anyway (more on that later). Let them know this is a serious and binding process, and that you are demanding proof.

Things to Avoid

The RFP process falls apart quickly when offerors use it too frequently, unnecessarily, or exclusively as a sales tool. As often as bidders miss the point with a proposal, offerors miss the point when crafting their RFPs. Avoid using an overly complicated RFP process to address simple questions that could have been answered succinctly and directly through a traditional sales meeting. Ultimately, you run the risk of alienating prospective bidders who, perceiving your overreliance on unnecessary paperwork and bureaucracy, decline to participate. Though not realizing it, you may be harming your chances of finding the perfect vendor. However, if you operate in a heavily regulated environment or in the public sector, where RFPs are mandated, you must still keep your questions relevant, direct, and targeted to the program. If you opt to exploit this process as a broader fishing expedition, you’re less likely to lure fish to your hook. And those that bite will probably be thrown back soon enough.

2014. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

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