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Responding to RFPs is unique for several reasons.
When making purchases, companies of course are not subject to public procurement laws and thus have the luxury of making large, complex purchases in a more streamlined (and perhaps rational) manner than governments. Some issue RFPs for large projects but when they do they usually send the RFP to a select set of vendors, and the selection of the vendor does not necessarily have to be quantified and stand up to public and legal scrutiny. They take all factors into account and make a rational judgments on which vendor will be the best for the company.
Governments try to do the same thing as commercial companies in procuring large, complex products or services, except they are subject to procurements laws requiring that:
Government award procedures generally are as follows:
An RFP is issued containing the project specifications, requirements for the content of technical and price proposals, formal technical and price proposal evaluation procedures, and numerous clauses and detailed bid submission instructions.
The basis of the evaluation procedure is usually a numeric scoring scheme establishing a maximum number of points assigned to evaluation factors (criteria) such as understanding of the problem, technical approach, project team experience, and company qualifications. End-users and contracting officers jointly decide the factors and the scoring weights. Price usually is not assigned points but it can be. In most RFPs, a statement is made about the importance of price.
An evaluation committee is formed usually comprising end-users (e.g., Chief Information Office or his designate for an IT service procurement) and primary stake holders (e.g., users who are impacted by the project). Like scoring factors, the size of the evaluation committee varies among procurements.
Each evaluation committee member scores vendor proposals according to the evaluation procedure published in the RFP. Price is always an important factor and prices are weighed against technical scores. An award recommendation is then made, documented, and sent to the contracting office.
The Purchasing Office Director (state and local agencies) and the contracting officer (federal government) play an important role in the award process and are legally delegated to make the final award decision. They (or their designates) write the RFP with input from the end-user and oversee the proposal process. Their job is to ensure that the playing field is as level as possible given the inherent subjective nature of the process. Stated simply, their job is to interface with the bidders on all RFP issues and questions, make sure the procurement regulations are followed, and ensure the integrity of the process.
Generally speaking, the evaluation processes conducted by the government are about as fair as they can be, given the public nature of government procurement. In spite of the formality of point scoring and weighing of prices versus point scores, the decision, in the end is, is fraught with subjectivity. There's just no avoiding that.
Reading GAO Bid Protest Decisions often helps one get a sense of the subjective nature of the negotiated procurement process. One example is Matter of SelRico Services, Inc., at http://www.gao.gov/decisions/bidpro/2866644.htm (contract awarded to lower-priced, lower-rated offeror in procurement where price was stated as least important evaluation factor).
End-users are the keys to selling products and services purchased using RFPs. Often they will be professional managers, scientists, or engineers, who know their industry, communicate with other professionals, read trade journals, and attend trade shows and association meetings. Their jobs, performance ratings, and salaries are often tied to the equality of the contractors they select.
If the RFP is for services, they are intensely interested in your project manager and the quality of personnel you can provide. They'll want to know what work you have done in the past, references, and, in general, something more concrete than just reading a paper proposal.
If the RFP is for complex technical products or a solution (products and services), they'll often have preconceived opinions of what products or services they want. They do not operate in a vacuum and act much like commercial end-users who know their industry and the products and services offered therein.
Because of their size and importance to the end-user, a majority of negotiated procurements have a background that frequently influences the selection of a contractor. Examples are:
What does all this tell us?
As an example, for a service procurement suppose an end-user has to evaluate and assign points to the resume of a project manager. A few more points may creep into the score if the end-user knows and respects the person behind the resume. Remember that the end-user may have to work with the manager every day during the project and the manager's performance may well reflect on the end-user.
Heavy front-end sales efforts and large, expensive proposals cause sales costs to be high for negotiated procurements. On the other hand, your wins tend to be large dollar and you can nurture a single customer for many years if you provide exceptional contract performance.
The key to keeping sales costs reasonable is a high win percentage. You will win often if you:
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