In a tender, specifications must set out in detail the product description, it is impossible to ensure that the items being offered are fungible. In an RFP, the specifications are more open-ended. The goal of an RFP is to seek alternative ways of dealing with a problem, rather than to specify how the problem must be solved. Care is, of course, required.
In a tender, specifications must set out in detail the product description, it is impossible to ensure that the items being offered are fungible. In an RFP, the specifications are more open-ended. The goal of an RFP is to seek alternative ways of dealing with a problem, rather than to specify how the problem must be solved. Care is, of course, required.
Specifications should, to the extent practicable, emphasize functional or performance criteria limiting design or other detailed physical descriptions to those necessary to meet the needs of the municipality. However, to keep cost to a minimum and speed the supply process, there is a clear merit in specifying that identified needs should be satisfied by standard commercial products when ever practicable.
Generally, whether one is using a tender or RFP, it is possible to be sufficiently specific to guide suppliers properly as to what is required, without dictating a particular solution for the problem to be solved.
The drawing up of suitable specifications is one of the most difficult aspects of the purchasing assignment. Very frequently, one finds that the specifications used in an RFP or tender can be traced back to some manufacturer’s product description. Often, the specifications in question are unrealistically precise in the requirements that they set down, delving into an entire range of specific details that would either be irrelevant to any rational customer, or which require a great deal of technical expertise to place in their proper context. To illustrate this point we can look at some of the technical specifications for wind farms. These days, with green energy being all the rage, many municipalities are looking at the installation of wind turbines as a suitable response to growing concerns over fossil fuel usage. Currently, several manufacturers are biding in the market place for industrial wind turbines. Each one of them offers a range of equipment.
When product description material of this nature is used to draw up a specification, one finds that suppliers will be asked to bid to supply equipment that is tied exactly to one of the products available in the market. So, for instance, suppliers may be asked to quote for generators that produce “at least” 1.5 MW of electricity, while having a blade length “no greater than” 116 feet, a hub height of no more than 215 feet, and a swept area of no more than one acre.
The fact is that none of these product descriptions are necessarily superior to any of the others. As the figures indicated make clear, large blades that occupy a larger swept blade area, and that rotate at a higher speed, produce more energy than smaller blades moving at a slow speed. However, swept area may be a far more relevant consideration in the final purchase decision than the amount of energy produced. Furthermore, far more important then the ability to produce a given level of energy, is the anticipated cost of producing a sustained level of energy across the life of the proposed generating facility. Aesthetic and similar constraints may also be highly relevant to the purchase decision. These same concerns apply even if one draws up specifications using averages as the ideal target.
Ideally, the specifications for an RFP should identify needs rather than proposed solutions. The adoption of such an open-ended approach allows the contracting authority to seek the best solutions available without defining the technologies involved. Such an approach is premised upon the assumption that customers do not know what suppliers have available or what they are planning to bring to market. An RFP which contains tight specifications that limits suppliers to a defined technology thwarts the fundamental purpose of an RFP, with the result that in the end, the contracting authority may not get the most cost-efficient solution.
Stephen Bauld, Canada’s leading expert on government procurement, is a member of the Daily Commercial News editorial advisory board. He can be reached at stephenbauld@bell.blackberry.net.
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