Slowing Down to Speed Up: Sourcing Alliance’s Number One Recommendation for Drafting RFP Specifications
Part 5 of a 6-Part Series
Here’s a common scenario:
James is the Director of Purchasing for a large sewer district in Pennsylvania. His team consists of eight individuals whose primary responsibility is to procure and manage the products and services the sewer district needs to operate.
When any given contract is expiring, James and his team will typically re-issue the same RFP they issued the last time for that product or service. How else can you keep up with 500+ contracts, limited resources, and a shrinking staff?
The unintended consequence of this “dusting off the old specs” approach is that James and his team have now issued an RFP that i) has specifications that are at minimum 3-5 years old, and potentially 15-20 years old, ii) does not reflect industry changes since the last time the sewer district went to RFP, and iii) does not take into the account how the specific needs of the sewer district have changed since the last RFP. But what’s the alternative?
Today’s segment of the Law of Unintended Consequences Meets Public Sector Procurement provides Sourcing Alliance’s #1 recommendation for developing best-in-class RFP specifications that meet the needs of your organization today and reflect the most current industry developments.
Sourcing Alliance’s 15 years of experience in the procurement industry has conclusively proven that talking to leading industry vendors to i) learn about industry changes and trends, ii) understand that vendor’s capabilities and competitive differentiators, and iii) request sample specifications you can “borrow from” when you’re developing your RFP prior to developing and issuing a request for proposals (RFP) will significantly improve both the quality of the specifications you draft, and the effectiveness of the solution you ultimately receive. Why? Because there is no way to be an expert in every spending category. Yes, an organization may engage in procurement and contracting processes every day, but that organization does not procure every product and every service every day. Who knows more about a spending category than the vendors who work in the industry of that spending category every single day?
Typically, when Sourcing Alliance presents the recommendation to engage with vendors in advance of issuing an RFP, we either hear i) that makes total sense, or ii) one of the following three concerns. We have also included our response to each of these concerns.
1. Favoritism – I don’t want to appear as if I’m showing favoritism to any one vendor.
“If I meet with a vendor to learn about their capabilities, understand recent industry changes and trends, and ask them for sample specifications that I might include in my RFP, and that vendor wins our contract award, aren’t I opening myself up to charges of favoritism and potentially the contract award being challenged?”
The idea of a contract award being challenged because your organization supposedly showed favoritism is a valid concern. The best thing that you can do to avoid charges of favoritism to any single vendor is schedule pre-RFP publication discussions with more than one vendor. Talk to at least three, but the more the merrier.
If you aren’t sure which vendors you should talk to, take a little time to do some research. You may search the web for key players in the industry, ask an industry-specific association for a listing of quality vendors, or ask for a list of vendors from other organizations who may have recently conducted an RFP for the same product or service for references. The point is to talk to as many vendors as your time and resources allow.
2. Influence – vendors are going to try and influence the RFP process.
Awareness is key. Of course vendors are going to try to sell you on their company. When you’re thinking about buying a car and you go to multiple car dealerships to learn about the cars they have, you know the salesperson is going to try to sell you that car that day. The reason you went to each of the dealerships was to learn about your choices. Education is an integral part of the sales process. Take the free education and ignore the selling.
Your number one objective in talking to vendors is to educate yourself on their industry. Start by developing a list of questions that you want to ask each vendor that you talk to. Stick to that list of questions. Take the answers you receive and ask yourself:
- What are the consistent messages you heard from the vendors you talked to?
- What are the nuances you heard that were specific to a particular vendor or subset of vendors?
- How might you draft/revise your RFP specifications given the information you received in your various discussions? What would you change? What would you keep?
3. Time – I don’t have time to talk to vendors.
Yes, time is a luxury that very few organizations have. That said, we are not recommending that you utilize this approach every single time you conduct an RFP.
We are recommending that you take the time to engage with vendors when the product or service you need to procure is in an industry with which your organization is not familiar and you’re making a significant purchase. Again… no one can possibly be a procurement expert in every purchasing category or know how to navigate the nuances of each industry.
Before you develop an RFP for any products or services your organization needs, leverage the knowledge of the vendors who work in that industry. Ask them about how the industry has and will change, discuss standard industry contract terms, request sample RFP specifications to review, ask questions about the specific needs of your organization… learn as much as you possibly can. Why? Because putting in a little extra time at the beginning of your RFP to engage with vendors will significantly improve the quality of the specifications you write and the effectiveness of the solution you receive.
What costs more time? Spending a day or two talking to vendors in order to develop an RFP that is current and meets your actual needs? Or dealing with the headaches over the entire life of a contract when you either have the wrong vendor, the wrong products and services, or both? As the saying goes, an ounce of prevention is worth a pound of cure.
At Sourcing Alliance, we understand that time is limited and workloads are constantly increasing. One part of our job is to help our members find the solution that works best for the needs of their organization. In our experience, talking to vendors before developing and publishing an RFP helps our team draft better RFP specifications and ultimately provide a solution that meets the diverse needs of our members.
In our next and final segment of The Law of Unintended Consequences Meets Public Sector Procurement, we will discuss ways to encourage competition when conducting an RFP process. Read the Top 5 Recommendations to Stimulate Competition in Your RFP Process.
As always, our website offers a wealth of knowledge and resources about how you may leverage your Sourcing Alliance membership to secure the products and services your organization needs to operate, save time, get better contract terms, and leverage our members’ combined buying power to secure lower prices and a reduced Total Cost of Ownership.
Missed our last edition? Click here to view our seven strategies for establishing the upper hand when negotiating customer agreements.