As a Proposal Manager for an IT company I spend a lot of time reviewing and responding to Requests for Proposals (RFP) and Requests for Quotations (RFQ). These are essentially two different terms for the same thing. Federal and Department of Defense customers have a great resource in crafting RFPs/RFQs in the Federal Acquisition Regulations (FAR) which provide guidelines/standards for government customers and contractors submitting bids. Commercial and Non-Profit organizations don’t always have a standard for RFPs/RFQs so these can differ greatly from one organization to the next, but regardless of the format, they have the purpose of identifying a contractor to provide IT services. If you are tasked with developing an RFP for your organization, the below are some considerations that I think will help you improve the quality of responses you receive from vendors.
RFP’s Most Common Problem
One of the most common problems I see in an RFP is a lack of background for what the customer is requesting. In trying to identify the right solution to propose (type of service/support, best technology, amount of necessary hardware, etc.) the biggest challenge can be not knowing what the customer already has. A new solution should fit within your existing IT infrastructure and a modernization effort needs to have a firm understanding of your current state. Often the customer has existing software, licenses or available hardware that can be incorporated into a vendor’s technical approach, saving the customer money and better integrating the new application with existing ones. If you don’t have a strong IT background and your organization lacks an appropriate technical subject matter expert to compile this information, consider having discussions with potential vendors prior to proposal submission to allow them insight into your environment. In the end you will get more viable solutions proposed to you if they are in the proper context of your environment.
Provide Detailed Requirements
Another challenge in developing a technical solution for a customer is knowing how they intend to use the application they are requesting. Minimal RFPs may simply ask for a new website with basic requirements of updating the look and feel of the existing pages and content. However, if you can go further in providing technical requirements, then a bidder can more accurately gauge the level of effort to meet your needs. Include any actions that your site visitors can take so that functionality and usability can be incorporated into the new design. Provide requirements for site traffic, peak or surge times so that appropriate hosting can be identified for the quote. If you are looking for a vendor to provide a business application, then provide workflow that the application will support, anticipated data, and other systems it must interact with. Also if you have any technical constraints that a solution will need to adhere to, provide that in your RFP so that a bidder will define their proposed solution within those constraints.
What’s Your Budget?
I can see how you would balk at this, if you were to put a number out there, then bidders would focus on that target instead of providing their lowest offer. However, IT services and custom applications can vary greatly in cost from factors such as level of experience of support staff to the complexity of the application. Additional factors such as design can also increase costs, so bidding without an understanding of a customer’s budget can lead to solutions that are completely unrealistic. Consider this, you are looking for someone to provide you a service or an application, you aren’t looking for them to provide you a bill. If you give an estimated budget to all bidders, then you will receive multiple competitive solutions which are within your budget. Bidders will always have to consider their quote amount against other bidders, but if they know that the competition will be within the same price range, then they will need to compete with their technical solutions – what they propose to provide for that amount.
The more information you can provide vendors responding to your RFP, the better the solutions they will be able to propose to you. Giving this information doesn’t put you at a disadvantage, it puts these technical experts closer in touch with your needs and will give you a viable set of solutions from which to choose. It isn’t to your benefit to reject quotes that are technically not feasible or way outside your budget. Every bid you get should be a potential solution for you to choose, and then you should be able to choose the best of the best.