As more municipalities continue to issue RFP and tender documents that transfer all the risk to the contractors, the bidding pool is getting increasingly smaller.
As I travel the country talking to contractors, the general feeling is that it is no longer viable to bid on municipal contracts. I was in New York City recently talking to contractors and it would appear that the United States is experiencing the very same issue.
There are numerous areas of concern in relation to RFPs, many of which are shared with tenders and other forms of competitive procurement.
Others, particularly the method of evaluation, are either unique to RFP procurement or of a greater order of magnitude in relation to an RFP. One of the most important distinctions between an RFP and a tender relates to the kind of submissions that bidders are expected to make.
In a tender, the bidder completes a relatively simple form that requires it to disclose its price and provide certain other basic information. It may also be expected to provide a few additional documents (e.g., a bonding commitment) to confirm it will be able to carry out the contract if awarded.
Since this kind of information is usually readily available to any commercial supplier, from the supplier’s perspective, a tender actually represents a relatively simplified and low cost method of seeking business in comparison to the lengthy wooing efforts that are usually employed in the private sector.
With an RFP, there is a manifold increase in the burden imposed upon the contractor in order to prepare and submit and thereby participate in the contract competition.
For example, in relation to a RFP issued by the City of Kyle, Texas, for the design and construction of a recreational facility, the bidders were required to submit proposals that satisfied extreme content requirements.
Proposals were required to include a conceptual site plan, study models, perspective sketches, electronic modelling or combinations of these media, touching upon relevant aspects of the City of Kyle Parks Master Plan, recommendations by staff, citizen surveys as part of the overall layout and conceptual design of the facility, and assessing staff usage, operation and space relationships at the facility.
Any drawings prepared were required to be provided in AutoCad format as well as jpeg and PowerPoint format.
After the RFP submission deadline, and the evaluation of those proposals by the city, the RFP contemplated that a shortlist of proponents would be selected and invited firms would participate in an interview by the city’s park board.
The selected candidates would be expected to make a 15-to 30-minute presentation regarding their proposal and answer related questions, so each interview would last approximately one hour.
As we all know, requirements of this kind are far from unusual in Canada.
It is self-evident that in order to accommodate the complex kinds of proposals that are submitted in response to an RFP, it is necessary to move a considerable distance from the rules that govern an ordinary request for tender.
In part because the RFP process is so demanding on contractors, and in part because it is no less demanding on municipal staff, one option that is often considered is to engage in some sort of pre-qualification exercise, in which a shortlist of prospective contractors is identified before the most detailed work begins.
In such cases, the municipal bylaw needs to deal with whether the list of prospective contractors should be limited to those who have preregistered or prequalified; when should prequalification be mandatory; how should the prequalification process be conducted; and what considerations are relevant.
Stephen Bauld is a government procurement expert and can be reached at email@example.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.