Acronym

Hi Scott

Accountants invented RFPs, not CEOs.

Of course, RFPs can net great results if you invest as much effort in crafting one as in the final project. And, in fact, I hiring a management consultant to help craft the RFP on a critical initiative isn't a bad idea.

In general, RFQs can be more productive getting answers to questions you're not asking.

Cheers
Ann O.

I still use RFPs for many of my larger projects. For me, I use it as a tool for myself first, as it helps me identify the purpose and scope of the project, and gather the relevant background information needed to make an informed decision. And I am very careful in deciding who gets it. I spend more time researching and narrowing the list of potential vendors before the RFP ever goes out. I don't want to waste my time, and I certainly don't want to waste the time of vendors by issuing something to more than a select handful of them, but I do find that the process helps me compare apples with apples.

I am not an RFP guy. I would rather have referrals and good coversations to hash out details and get input.

In theory, RFP's should level the playing field. In fact, though, without the budget data, that's impossible. That in turn gives the advantage to the firm with an "inside track" of some sort. Firms that are large and sophisticated enough to engage in fulltime lobbying and professional relations are also in a position to influence the direction and content of RFPs; this is why some firms automatically reject bidding on an RFP they had no hand in formulating.

Again, making budget and level of effort data available in the RFP, along with expectations about the issuing firm's expectations about involvement in the bidded project -- which directly impacts project cost -- would make the process fairer and more likely to help the issuer get what it needs out of the process.

If the issuer has no idea of what the budget would be, I would also question the wisdom of using the RFP process to gather that information.

Interesting timing - I just finished a two part series on this very topic for my company's blog, the BFWire. The articles are do's and don'ts from the perspective of clients writing an RFP (part 1) and of vendors responding (part 2). And my very first point? Don't do an RFP.

Scott - Thanks for this post. I have felt for some time that RFPs are generally not serving associations well. I wrote about it a while back in A Modest Proposal: Kill the RFP

RFPs simply do not lead to the sort of relationship with a vendor that is likely to produce the best overall value - and that's usually true even if you bring in a consultant to help write and manage it. I agree with Jennifer that you certainly want to spend significant time researching large projects, and something akin to an internal RFP document may be useful for this. But the process of sending out a large, feature/task-laden document to a group of vendors leads to more negatives than positives, in my opinion. Something closer to the process you describe at the end of your post is a much better approach. - Jeff

Scott, thanks for mentioning this post. In being on the service provider side just 3 years now not including past agency positions in between association roles, I notice things about RFPs and vendor selection, but I rarely think about them in aggregate or as a systematic process.

It seems in our networking groups and ASAE consultant's council meetings that many of my peers HATE RFP's ... which in turn makes me think they must be serving their purpose to some degree. (If we service providers absolutely loved RFP's I would in turn wonder if the procedures that associations are following are actually serving them well.)

Probing the objections a bit, the problem is not so much the RFP per se, but how they are written and used. If know I'm short listed or contacted as a sole source, I will ask the client to provide me with information comparable to what they would have put in an RFP. Sometimes I'll also ask them to consider a limited number of alternative service providers so they can make the best choice. Regardless of that first contact--someone writing an RFP or contacting a vendor and the vendor responding back or reading the RFP--it's really the next stage of contact that gives us the mutual opportunity to truly 'qualify' one another.

Most of the time even the most basic parameters that would impact cost are excluded from the RFP, and every conversation yields at least 2 or 3 nuances that would have been hard to put in writing and the association may not have understood its importance in the first place. At least in our work I want to understand as much as I can about the institutional history, the paths it has considered but not taken, etc. This affects the proposed solution and also tells me much more about 'what we're in for' if chosen. In turn, offering samples, discussing parallel circumstances with other associations helps the association understand what they're in for if they choose me.

Reflecting a bit, I think it's natural for us to not like the process--more up-front work for the association, and for consultants it's like having to interview for a job you'd just like to be given. But to me, the RFP (or something a lot like it) helps to streamline the process and focuses the association on articulating their challenge to a variety of people who can help. We may have different ways of helping which also entail different specific services and cost structures, so it may not yield the apples to apples comparison that a CFO would want. But it definitely gives the association a coherent menu of options they should consider when there isn't one best solution.

-kevin

I wonder how many times an overwrought RFP has kept the best vendor from responding. I like Jennifer's idea of using it as a tool for herself, first. The most important step in the process is understanding what you need and thinking through how you want to work with a vendor to achieve your goal.

Some association execs use RFPs to be "fair." They don't want their boards or others to think they are awarding business to personal friends or acquaintances.

Other times, execs don't know how to choose from among many alternatives, so they cast a wide net to attract as many applicants as possible.

Responding to an RFP IS applying for a job. The unfortunate fact of life for consultants is you have to apply for jobs all of the time.

Some RFPs - particularly in engineering and manufacturing - must be very detailed. But a lot of association RFPs can, and should, be brief. And all applicants should get feedback - nobody wants to spend a lot of time responding to an RFP and merely receive a "no thank you" or worse - get no response at all.

RFPs don't kill people, people do. The difference between a good one and bad one is in how they are written and implemented.
If RFPs weren't around, we would have to invent them. We need a clear structure to evaluate different proposals. They help me do my job. If someone says, "I don't do RFPs" (and some have), I move on. I guess they don't need my money.

Hi Frank,

I am little confused. You say "we need a clear structure to evaluate different proposals." Why does this have to be an RFP? Wouldn't it make sense for you to develop a clear set of criteria that a potential vendor has to meet to even be considered and then go out to vendors you trust or who are referred to you and make sure that they know of these criteria in advance so they can respond in a way that allows you make an educated decision? Maybe we are saying the same thing and it is just semantics but most of the RFPs I have seen do not clearly tell the potential vendors enough about the scope of work or about how their proposal will be judged.

Have a good weekend!

Scott:

You and I have followed the exact same path--association executive turned service provider/consultant. I agree with you that the majority of RFPs achieve very little and waste the time of both the service provider and the personnel involved in putting them together. Yes, most are overly general (though there is something refreshing about that rare RFP that is well thought out and specific). And yes, in the year 2008 when I see the requirement that an RFP be submitted in hard copy, I have to laugh. (I also can't remember the last time I actually wasted my time submitted an RFP in hard copy.)

But here's the real kicker. In my particular situation, one may sample for free the service my company provides (which I'll not divulge here lest it should come off as a shameless promotion). So not only do RFPs waste my time and the time of the prospective client, but there is nothing that could better help the prospective client understand the service my company provides but than to actually sample it hands on. Then, once they've done that, if they have specific questions, I'm always available for a conference calls. Plus, the time spent on the call is much more productive since the client has spent time with the service and I can have a much more well-informed discussion with him/her.

Sometimes when I point this out to prospective clients who've sent RFPs as the first step rather than to sample the service as the first step, the prospect will heed my advice. Other times, they may have already married themselves to a process from which they may not deviate. That's unfortunate for them because my company happens to be one of the two leaders in its market, yet the client--with their inflexible process--may ultimately select a vendor who isn't one of those two leaders and end up using a lesser service should I choose not to engage in the RFP process.

Ultimately, there may be certain purchases which well-assembled RFPs can help buy. For other things, they can waste time.

Having spent over 25 years in nonprofit management, I, too, have sent out my fair share of RFPs. But I would have to say that during that time and my 3+ years as a consultant, I have seen very few (count on one hand) RFPs that were actually detailed enough to produce an apples-to-apples comparison among proposals. This includes many that I wrote and many written by other consultants.

For large projects such as web strategy and redesign, vendors will offer very different methodologies. Unless an association has predetermined the specific approach they want to take, it will be very difficult to evaluate proposals based on the RFP response.

My advice: Rely heavily on referrals for vendor integrity and quality of work; use a vendor questionnaire to get a quick overview of past work and proposed hourly rate; narrow your search to 3-4 vendors and meet with each to evaluate approaches and fit with your association; negotiate the best deal you can get for hourly rate; and scope the project to fit within your budget with a 20% buffer for unexpected work that may emerge from early project discovery.

I spent the first 18 years of my career buying e-learning products and services. I always used RFPs for projects that were over $25K. But, when I issued an RFP, I always knew exactly what I was buying and I knew who sold it.

Now that I've been on the selling end of this equation, I got a rude awakening with regard to how many organizations do RFPs. The problem isn't with doing RFPs, it's with the lack of research on the buyer's end to understand what they are buying and who sells it. If you understand what you are buying and can narrow the field to a few vendors who can meet your requirements, I think an RFP can serve everyone well.

However, if you don't really have a clear understanding of the requirements and product/service differentiation, you would be much better served asking for referrals and having conversations with a few select vendors.

Now as a vendor, I don't mind spending an hour or two educating a potential customer for free about e-learning technologies. But, I've learned NOT to respond to RFPs that are vague, come to me blind or are sent to more than 5 vendors. Since it takes me about 8 hours to write a thorough, client-focused proposal, I limit my responses potential buyers who can show me that they are truly interested in what my company has to offer. Please don't be offended by this, but I now think of it kind-of like a gamble... what are my odds of winning and is it worth giving away 8 hours of my time to buy a ticket?