Pondering Procurement

As a consultant, preparing proposals are a necessary part of winning business and securing work. On that basis, I do not consider them a ‘necessary evil’; they are simply necessary. They are what allows me to confirm a client’s expectation and needs, propose a solution to those needs, outline how the work will be done and provide an estimate of the price. Responding to Requests For Proposals (RFPs), however, are a whole different undertaking.

A significant number of contracts with public organizations (in other words, governments, crown corporations and many not-for-profits) use RFPs. Not all, mind you. But a significant number. The theory of this is that it makes the procurement process fair and transparent, and doesn’t allow favouritism towards any one vendor.

The reality, however, is that favouritism does exist. Sometimes it’s subtle, and sometimes it’s blatant, but it is often present. I usually know when I’m likely to succeed in an RFP – because I’ve done work for a client before, or had discussions with them about their needs that led them be able to better  articulate what they are looking for. I also when I’m not likely to win – which is virtually any time I haven’t heard about an RFP before it actually comes out.

Sites like Merx, Biddingo and Alberta Purchasing Connection exist to theoretically link buyers and sellers in an open and fair manner. Buyers can submit RFPs to be responded to, and sellers can survey the opportunities that are available. The challenge is that, for the vast majority of RFPs that are publicly posted, there is already an intended recipient. Sometimes that intended recipient doesn’t win — they may have taken the proposal for granted or not sufficiently sharpened their pencil, or another vendor may have gone out of their way to provide an exceptional response. But often there is.

In a  recent article in the Globe & Mail, Susan Abbott highlights many of these issues, from the perspective of the consultants responding to RFPs as well as for the vendors in developing them. Simply put, the process is often far longer and more cumbersome than it needs to be, without really focussing on the information that would enable a best determination of fit.

What an RFP is supposed to do, after all, is find the best vendor and the best solution. This should theoretically be the one that expresses the best understanding of the client’s requirements, has the most appropriate solution to address those requirements and offers people that will work most effectively with the client’s organization. All for a price that the client is actually willing to pay.

Too often, however, what an RFP is really about is price. Which, to be perfectly candid, is an utter waste of time for everyone. If you care about price, use a Request for Quotation (RFQ). Have everyone submit a one-page bid of the hourly rate they’re prepared to do the work for, and pick the lowest one. Easy, simple, straightforward and cheap. You won’t find out about fit, or relevance, or understanding of course; but if all you care about is price, then call it like it is.

There are those, I’m sure, that will consider the last paragraph cynical, facile and disingenuous. Or, to put it another way, that I’m being disrespectful of the process. I wish I were. A recent post by Cory Doctorow, with the inappropriate, cynical and nonetheless amusing title of “Why UK government IT sucks so hard”, disclosed the rating criteria for a major (£500,000) software development procurement for the Northern Irish government. There were two: 95% of the weighting is price, and 5% is quality. Whoever isn’t lowest-cost bidder is deluding themselves that better quality is going to make a difference in that procurement.

This was an obvious (and painful) example to read about. But many other procurements heavily weight on price, as well. Whether the weighting is 40%, 60% or 75% of the procurement price, the message is, “We value cheap more than good; we value cost more than fit; we value price more than performance.” Caveat emptor, baby. When that consultant fails to deliver what you want, call me and we’ll talk.

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