Sourcing Alliance’s Top 5 Recommendations to Stimulate Competition in Your RFP Process
Part 6 of a 6-Part Series
One of the primary objectives of a public sector procurement process is to encourage competition amongst vendors. Why? Because encouraging competition is a part of our fiduciary responsibility as stewards of taxpayer dollars.
Despite the intention to encourage competition amongst vendors, several common practices within the typical RFP process have the unintended consequence of reducing, rather than stimulating, competition. Today’s segment of the Law of Unintended Consequences Meets Public Sector Procurement provides Sourcing Alliance’s top five recommendations to stimulate competition in your RFP process.
Invest time in proactively identifying potential vendors before you publish your RFP.
Our job as stewards of taxpayer dollars is to make sure that we follow all applicable public sector procurement guidelines when purchasing products and services on behalf of our organization. So, what do we typically do? We:
- Publish notice of the procurement opportunity in a newspaper of general circulation, on-site at our physical offices, and online.
- Establish a date, time, and location at which bids/proposals are due.
- Define our requirements/specifications and how we will select the winning vendor.
- Establish a fair question and answer process and a time for a pre-proposal meeting that is open to the public, during which potential respondents can ask questions or seek clarification.
Now by all means, let’s do what we are legally obligated to do. But, does fulfilling that obligation alone ensure that we are maximizing competition? Consider this:
In Ohio alone, there are approximately 4,000 public sector entities (92,000 nationwide if you were curious). The common expectation is that any vendor pursuing business in the public sector will be responsible for identifying procurement opportunities at those entities. However, it is virtually impossible for any vendor to keep track of every single procurement opportunity each public sector entity publishes, let alone respond to them. In our experience, investing a little time in proactively identifying and reaching out to potential respondents before you publish your RFP is a great way to stimulate competition in your RFP process.
Yes, time is a luxury very few of us have. But, if the true focus is on being a good steward of taxpayer dollars, why not do a little more to get the most out of that spending?
As we said in our last edition, what costs more time? Spending a day or two identifying and reaching out to potential vendors prior to publishing your RFP? 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?
Extend the amount of time allotted for vendors to respond to your RFP.
Public sector procurement guidelines typically require public sector entities to publish an RFP for two, maybe three consecutive weeks before proposals are due. Now, I’m sure we can all agree that a lot can happen in two weeks. Let’s think about this from a vendor’s perspective:
Again, in Ohio alone, there are approximately 4,000 public sector entities, 92,000 nationwide. As a vendor, you may not catch wind of the procurement opportunity right away and for you, it may take the full two weeks, maybe more, to develop a response. Therefore, if you didn’t see the RFP the day it was published, you may not have the time to respond.
Or, let’s say your schedule is booked solid for the next two weeks. If you knew about the procurement opportunity ahead of time (see recommendation one), then you could have prepared, but because you didn’t, you cannot respond.
What if one of your team members that is typically involved in responding to RFPs is out sick, or on vacation?
The point we are making is that two weeks can quickly slip away from a vendor. If you aren’t crunched for time, why not extend the amount of time allotted for vendors to respond to your RFP? Allow vendors the proper time to plan and allocate resources towards developing a quality response so that in the end, you’re getting the best solution.
Communicate the purpose and/or the context of your RFP.
Picture this. You are a vendor who has just received notice of a new procurement opportunity with a public sector organization. The notice reads the following: “We’ve published our RFP for HVAC. Please see the attached”. You click on the attachment only to find a 100+ page document that you now have to make sense of. Where do you even begin? The reality for many vendors pursuing business in the public sector is that published RFP documents typically come with little to no context.
Here are the kinds of things that vendors want to know:
- What is your organization issuing an RFP for and why?
- How does a vendor respond to your published RFP?
- What are you looking for when scoring RFP responses?
- What are the key dates and overall timeline for the RFP?
Providing context at the beginning of your published RFP in the form of a cover letter, executive summary or narrative allows vendors to better understand the challenge you currently have, so that those vendors can propose the best solution for solving that challenge.
Create an additional way to answer questions from vendors.
Traditionally, the pre-proposal meeting is the time to hear and answer questions from vendors during the RFP process. However, that pre-proposal meeting rarely answers all questions from all parties involved with responding to the RFP.
Establishing an additional way to receive and respond to questions from vendors is a great way to ease the process of putting together a proposal. We recommend documenting both the questions you receive, and your responses to those questions and sending that document to each vendor that received a copy of your RFP.
The key in providing this document is sending it early enough that vendors may utilize the information within the document before putting together their proposal.
Leave flexibility in your RFP specifications.
Here’s a quick story for you. A public sector organization had been purchasing their office supplies from Staples for the last five years. The organization wanted to potentially change things up and began to draft new RFP specifications. The organization took a list of their most frequently purchased office supply items from Staples and made that exact list a requirement in their specifications, no exceptions. Among that list of frequently purchased items was a Staples branded legal pad and therefore eliminated any vendor that wasn’t Staples.
A silly example? Yes, but the point is that often times we create RFP specifications based on what we are currently buying. It is important to remember that if you are buying products or services that are proprietary in nature and develop RFP specifications based on those products and services, then you automatically eliminate anyone who doesn’t have access to those proprietary products and services, and/or unintentionally provide the incumbent with an insurmountable advantage. Would you spend the time responding to an RFP if you weren’t the incumbent?
When issuing an RFP, leave flexibility in your RFP specifications. Try this:
Start by making a checklist of everything you want out of the product or service you’re purchasing. Invite vendors responding to your RFP to state whether they have exactly what you want, or propose/recommend alternates, comparable items, or substitutes with a rationale/explanation for each item they’ve proposed. This tactic ensures that your RFP specifications won’t unintentionally eliminate any vendor responding to your RFP.
At Sourcing Alliance, providing valuable solutions to our members is always the goal. In our experience, each of these recommendations increases the likelihood that more vendors will respond to the published RFP, and that in the end, our organization will get better results from that RFP on behalf of our members.
If you are interested in learning more about our organization, 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? Read Sourcing Alliance’s number one recommendation for drafting RFP specifications.