One of the most hotly contested issues I deal with on a weekly basis is how RFP’s are evaluated. Contractors always are concerned with the way the criteria are scored and how points are assigned.
Whereas a tender is a competition over price or full-life cost, under the RFP procedure, the normal practice is to enter into a contract with the supplier who has the highest overall ranking. Despite the looser contractual implications of the RFP process, it remains critical to the maintenance of a fair system that the evaluation committee apply consistent criteria when evaluating the bids.
These criteria should have been specified in the terms of reference for the RFP. Although the criteria that a municipality may choose are open-ended, the following are frequently encountered:
- the supplier’s relevant experience and extent of training, professional and similar methods and accreditation;
- the supplier’s available resources’
- references obtained from third parties; and
- timing of work (e.g., start date, time till completion, etc.); and cost effectiveness of the proposal.
The evaluation is, of course, a functionally related exercise: high weighting should always be given to those factors that relate to the suitability of each proposal to the intended purpose of the project.
The criteria should also be applied using similar methods of analysis. The evaluation committee will be expected to check proposals against these mandatory criteria.
Depending upon how firmly the project objectives have been defined, it may or may not be advisable for any proposal that does not meet all mandatory criteria to be rejected without further consideration. Except in a very unusual case, all proposals that do meet those criteria should be assessed and scored.
Frequently, a municipality will reserve the right to create a short-list from all proposals submitted to it (generally, the three or four highest scores). These suppliers will then be invited to attend an interview with the evaluation committee and make a presentation, expanding upon the ideas outlined in their proposal.
Direct negotiation with short-listed suppliers may also be considered to be a desirable option. Where it is considered advisable to provide for such negotiation, the terms of reference should make clear that suppliers may be asked to provide additional information at that stage, and to clarify (and modify) terms of their respective proposals.
In general, since RFP’s require a detailed submission, they tend to generate a relatively poor response level in comparison to a tender. This is especially the case where the RFP is distributed among the supplier following the all-too-common “toss it out the door” method, in the hope that someone will notice.
In this regard, the prevailing expectation of “open” competition works against the municipality’s interest. An RFP is more likely to attract supplier interest when a targeted solicitation of proposals is sent directly to businesses that are known (e.g., through past supply to another municipality) to engage in the kind of business concerned.
Poorly structured RFP’s in which the municipality’s requirements are badly written, or in which vital information is scattered around the document, further reduce the success rate. An RFP is not an alternative for market research by the client department and buyer, nor is it a substitute for negotiation.
Such research should be carried out by the purchasing and client department working cooperatively, before the appropriate procurement process is selected. The goal of that research is to identify the range of products (or services) on offer in the market, the key suppliers, the general price at which such products and services are available, the extent to which the goods or services of one supplier may be interchanged with another, and any particular risks to which the market appears to be exposed and so forth.
Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
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