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Let's Build an RFP – Part One: Prep to Publish

Posted by Mark Fallon on Jan 28, 2015 5:30:00 AM

The Request for Proposal (RFP) process is an excellent method to use for selecting vendors and products. You may need to use an RFP for many reasons. The equipment in your shop may be outdated and in need of replacement. New software programs may mean a digital solution to a manual process. You may want to analyze whether outsourcing a particular function will bring savings to your company.

RFP Prep to PublishNo matter what you purchase – equipment, software or services – how you purchase is more important. You can improve your chances for success by following these steps:

    • Conduct research
    • Hold meetings inside and outside your company
    • Assemble an RFP team
    • Draft and publish the RFP
    • Conduct vendor reviews
    • Call references
    • Compare the bids
    • Award the bid
    • Receive and accept the equipment or service

It's important to begin by researching the product or service you want to purchase. Conduct an internet search to find out who offers that product. Check out vendor websites and have literature sent to you. Read through industry publications, reviewing both advertisements and articles about the product you're investigating.

Use trade shows effectively. Visit vendor booths, especially vendors you don't know. Take the time to network with fellow professionals. Find out who's using what vendors and why. Collect business cards and ask permission to follow up with additional questions.

Next, hold meetings with people inside and outside your company. Meet with your procurement department to learn the company's procedures for the RFP process. Gather internal customers together and determine their needs and desires. Solicit input from product users, especially if those users are part of your staff.

Start to meet with potential vendors. Let the salespeople know that you're just beginning the RFP process and are only gathering information at this point. Put together a meeting of your peers from other companies. Conduct a panel-like discussion. Focus on what people have done, and what they're planning to do.

With this information, you're ready to put together an RFP project team. The size of your team will be dictated by the scope of the purchase. The more money being spent, and the more departments impacted by your decision, the larger the team should be. Select people who demonstrated interest during the research meetings. Keep the team size manageable, but try not to exclude any particular group.

You'll definitely want to have representatives from legal and procurement on your team. Depending on the policies of your company, procurement may take the lead role on the project. If equipment or computers are involved, get people from facilities management and information technology on the team. You should also invite the key internal customers impacted by this project. And don't forget the lead operators and programmers that will have to work with the equipment or software you purchase.

You may want to consider adding an external consultant to the team. An outside voice can be helpful when dealing with internal politics. But don't let the consultant tell you what to purchase. The selection of the software, hardware or service is up to you and your team. The consultant's role should be limited to guiding you through the decision process.

You're now ready to draft and publish the RFP. Clearly state at the beginning of the RFP what you want to purchase. Stipulate exactly what the product or service must do in order to be considered. Then state what additional capabilities or options are also desired.

Specify the format the vendors' responses should take. If electronic, identify both the software (e.g., MSWord, Acrobat) and the version. If you prefer hard copy, explain how you want it presented (e.g., stapled, bound) and how many copies you want. Most importantly, provide a clear deadline for submitting responses with the date and time that the proposal must be received.

To save time later on, include a copy of your company's standard purchase contract in the RFP. Instruct vendors to add any requests for changes to the contract. Have your legal department review the responses to determine if any of the requests represent a serious problem. If you're a small company without a standard contract, ask the vendors to submit their contract with the response. Have your legal department review the contract for any major pitfalls or challenges.

If you plan on conducting a lease/buy analysis, have the vendors help you out. Require that their bid have both purchase and lease options with a 5-year cost-benefit analysis. Make sure the vendor includes any formulas used in their comparisons.

You should consider holding a vendors' conference after the RFP is published. All vendors are invited to submit questions in writing by a certain date. You'll draft written responses to the questions, and invite all participating vendors to one meeting. At the meeting, review the answers one at a time, allowing follow-ups and clarifications at the meeting. This ensures that all vendors receive the same information at the same time, and keeps the process open and fair.

Next blog: Part Two: Analyze, Award and Accept


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