How Effective are your RFP’s?
That is the question and unfortunately many professionals do not have this question on their radars. They often roll them out the door not truly realizing how ineffective they are.
Request for Proposals are quickly becoming the go to procurement form. They are on the rise because more and more companies are using them for all kinds of project work. Whether this is the right form they should be using for the task at hand is another blog post altogether! In this post we are going to focus on how to improve the effectiveness of your RFP which will help you produce the desired results and how to write a RFP without spending extensive amounts of resources.
To get right to the point, you will save time, money and energy if you focus your efforts on the content you include in your RFP. Increasing and including the correct content will increase its potential for success.
What determines the effectiveness of the RFP you have spent hours developing?
- Is it the number of questions your supplier’s ask during the response period? YES, if you are getting lots of questions then the Statement of Work is not detailed enough.
- The actual number of quality vendor responses received? YES, responding to a RFP is expensive and vendors will put in the effort to provide a quality response if the deliverables are clear. A win for both parties.
- The prices quoted by your vendors? YES, this will be a factor. If your RFP content is clear the quoted prices will reflect this. Removing unknowns will reduce costs.
All the above can be indicators as to how effective your RFP is. Some would argue that a poorly written RFP and a weak SOW will yield both poor and more expensive results. We at RFQPro have continually informed our readers the importance of including enough information in your statement of work to ensure your Suppliers do not pad their quotations because they are uncertain as to the actual scope of work. When a supplier is unsure of what their duties will be, they will build in additional funds to cover any unforeseen requirements. This will result in the Buyer paying more to complete the project and drive up the project budget.
How do you eliminate this from happening…work with your field representative or consultant to develop a proper SOW. As the issuer of the RFP make sure all the commercial aspects are properly identified. If both of these areas are properly presented you will be well on your way to improving the chances of receiving quality responses from all the invited suppliers.
To recap, ask yourself these questions prior to releasing the RFP – Does your RFP contain sufficient information which will allow your vendor to create a solid proposal they could win based solely on the information in the RFP?
Insufficient detail is a primary reason why a project may fail. It may lead to reduced competition (vendors simply don’t propose or submit), legal challenges, unfair competition (often one vendor knows the requirement), higher project costs or prices (from risk of the unknown), exceptions and hedging will result from insufficient scope.