CWS 3.0: April 8, 2015

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Be clear and complete in your RFP: It matters

In my last column, I stressed the importance of transparency and honesty when developing an RFP. Suppliers count on that information in order to put the best foot forward and show how they can meet your needs. But often, buyers don’t include the types of information staffing providers need to know in order to decide whether to participate at all. Here are several necessary elements.

Why. A well-written RFP would make clear why the initiative is taking place. Is it the first step in a multiyear consolidation project? Is it a mandatory tri-annual rebid? Is your incumbent supplier having significant service failures? Each of those have distinct objectives in mind which may or may not align with the providers evaluating your RFP.

For example, many companies require certain categories of business to be rebid within a certain time frame, believing market pressure will keep incumbent suppliers pricing competitive over time. The problem is the bar to oust an incumbent in this situation is incredibly high, and often not worth the investment required to respond to the RFP. If this situation describes you, you need to be sure to communicate to the prospective bidders that the process is a true opportunity to gain business as opposed to a mere formality. Otherwise the best providers may decline to participate, leaving you with suppliers that may be desperate as opposed to capable.

Duration and plans. It’s also important for providers to know what you want the program to look like in three to four years. If you don’t have an MSP, do you intend to have one? And if you do, will that be going out to bid within the life of the contract? How about geographic expansion or division expansion? There are many changes that can occur over time, and it is important for your suppliers to understand where you are going to ensure mutual success for the long term.

Decision process. You should spell out how you will select the winning bidders. How many people are involved, what is the timeline, and what is the basis for comparing suppliers? Noting your priorities will enable providers strong in your areas of need to set themselves apart in their proposals. For example, if process efficiency is a core decision criteria, a responding firm with Six Sigma embedded in its culture would note that. And your decision process should be regimented and clearly tied to the questions in the RFP.

Realistic Volume. I said this last time, but it bears repeating: Don’t overstate your likely volume. You might look for certainty rates based on volume guarantees or work with providers to establish permutations and pricing to encourage better volume commitments.

RFP structure. An RFP is like a resume or a dating profile. Both are meant to be a starting point for determining whether it’s worth pursuing a long-term relationship. And just like looking for typos or errors in a resume, or glaring half-truths in a dating profile, providers will evaluate the RFP itself for red flags. So make sure to provide sufficient detail that aligns with your program. A $100 million opportunity with a one-page Excel spreadsheet is as problematic as a 37-page, 500-question RFP for a $50,000 opportunity.

I tell staffing firms they should walk away from RFPs if the documents are lacking, so if you are serious about attracting the best providers to participate in your RFP process, be sure what you put forth is the best document possible.