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Procurement Perspectives: A flexible approach expands opportunities

Stephen Bauld
Procurement Perspectives: A flexible approach expands opportunities

I have always said the RFP process allows a more flexible approach to procurement, which opens up the competition to a range of considerations beyond pure price. All complex construction projects should be bid using an RFP process.

Whereas a tender is premised on the assumption that the suppliers of goods and services offered by competing suppliers are fundamentally interchangeable, an RFP constitutes the contractual recognition of the reality that one size rarely fits all.

The goal of an RFP is to outline a general performance requirement or service need, and then leave it to the contractors to propose solutions that will fulfil that requirement. Requirements are stated in outline form, and contractors are asked to explain how their goods or services will allow those performance requirements to be satisfied. In addition, a range of “soft” evaluation criteria may also be incorporated into the evaluation process, such as experience, reputation and the like.

As a result, the proposals received have a much wider window of access: there are no narrowly defined specifications that must be matched exactly in order to generate a compliant bid. Price is not excluded from consideration, but since the premise of fungibility does not apply, price is not the sole criterion of reference.

The nature and causes of the problems that have been encountered with RFPs have varied. Generally, an RFP is more time-consuming for both contractors and customers than a tender. Efforts to cram an RFP process into a limited time period are likely to give rise to problems down the line.

The evaluation process is rarely as straightforward as originally imagined — invariably trade-offs must be made among competing objectives. Not infrequently, it is learned only during the evaluation process that the original specifications should have been set differently, and that the criteria that were originally assumed to be proper to serve as a basis for the selection of the best contractor are in fact not the criteria that should be used.

Obviously at that stage, it is virtually impossible to correct the error.

A second cause of problems is the tendency in drawing up an RFP to focus too much on particular items rather than on the big picture. For instance, in one RFP I looked at for the provision of remote air transportation services, almost as much space was devoted in the initial RFP documents to catering services as to describing the actual air service requirements.

In part, difficulties have been encountered due to overuse of the RFP method. It is frequently adopted not where the contracting authority wishes to consider a wide range of different forms of supply, but where the authority is uncertain as to what is required.

To some extent, such usage is inevitable since in many cases contracting authorities must purchase items that require ordering only infrequently. However, one cannot help but wonder how many times an RFP is employed because of a decision not to carry out the type of research necessary to produce a proper specification.

It is not uncommon to see an institution hire a consultant or consulting group to assist it in production of the RFP. In some cases, the contracting authority will expect the consultant to provide a complete package; in others, the consultant merely guides the contracting authority to produce its own final document.

Except in highly specialized fields, the latter is preferable to the former. As a general rule, consultant-generated RFP documents often lack sufficient detail with respect to the actual needs of the organization — a fact that is hardly surprising, given the likelihood that the consultant will have only a passing familiarity with the organization for which he or she is working, and will not know to whom questions should be put in order to secure a deeper understanding of its requirements.

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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