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on Wednesday, July 17, 2019 0


In this blog, we're taking a look at one of our (least) favorite topics: RFP Spam. For more information on identifying and avoiding RFP spam check out some our previous discussions: 


At their best, Requests for Proposals are valuable fact-finding tools. By casting an appropriately wide net, organizations can identify and begin to engage the supply chain partners they’re looking for. Many organizations, however, don’t exercise the proper care throughout the RFP design and administration stages. In search of meaningful partnerships, they wind up flooding the market with RFP spam.

What is RFP Spam? 

Typically, the process of sending out RFP spam means sending out a glut of RFPs and RFIs to the supply base without putting in much effort to customize the documents or define the appropriate audience. RFP spam is usually done intentionally. Most organizations know what they’re doing. They recognize that their chances of success are low, but they still lean on these ineffective practices rather than shaking things up. Occasionally, however, RFP spam is sent out innocently - as a result of errors or misinformation.

Types of RFP Spam

Emails to Generic Addresses
This is perhaps the most common form of RFP spam. Email address issues usually occur when buyers spend just a few minutes researching and collecting e-mail addresses for potential contacts. Generic emails usually appear as “info@company.com” or “Sales@company.com.” Procurement teams then load these emails into systems and set out RFPs in bulk. Problems arise when the email is delivered. Usually, the recipient has no information relevant to the project. More often than not, they’ll label the document spam and neglect to pass it along.

Hard-Copy RFP Spam
This error is similar to using generic email address, but tends to prove even more costly.. This method of RFP spamming involves collecting the physical addresses of supplier locations and to mail them physical copies of an RFP. This method is fueled by misconceptions. Remember, just because you send a physical copy does not legitimize your RFP. If a hard copy of an RFP is generic and arrives without warning, it’s just as likely to end up in the trash as an email.

 Templated Emails
This method, while usually a bit cheaper and more effective than the ones lifted above, still has its faults. In this scenario, the buyer “improves” the process by filling out a generic email template. This template will provide a brief overview of the project in question and a summary of supplier requirements. After the initial email, buyers will send the actual RFP. If no response is given, Procurement typically sends another template email in search of a response. As you can probably imagine, this method tends to annoy suppliers and lead them to disengage.

RFPs to the Wrong Company
You might not believe it, but this actually happens quite frequently. If a buyer spends too little time researching what a company actually does, they might mistakenly believe a company can meet Procurement’s needs. Such a situation is both embarrassing and costly.

What Causes RFP Spam? 

There are many reasons why buyers send out RFP spam, and they are all problematic. Your company’s RFP will be much better received and responded to if you consciously avoid the traps outlined above. Here are a few of the factors that might be standing in the way of successful RFPs and strategic supplier relationships.

RFPs are Treated as a Formality
This occurs when your sourcing team has already made the decision to select a particular supplier or solution, but internal policy/law requires your team to submit a certain number of RFPs. When you treat an RFP as a formality, it tends to read like one.

Procurement Puts too Much Trust in Tech
A lot of Procurement teams are under the impression that implementing an expensive piece of technology will somehow make the sourcing events more effective. Neglecting the human element, however, can mean sending RFPs that confuse and annoy suppliers. Never let the promise of a new solution convince you that a dedicated team of savvy professionals in unnecessary.

Procurement Lacks Resources
Some organizations simply don’t have everything they need to administer an effective RFP. Without the right people, tools, or processes, they’re stuck sending out generic RFPs and hoping for the best.

Procurement Hasn’t Trained its Team
A lot of Procurement professionals don’t even know the difference between a well-designed RFP and spam. Without the proper training, they might have no idea why they’re failing to get a response from suppliers.

The Organization Has an Elitist or Entitled Attitude
Sometimes RFP spam isn’t such an innocent mistake. In many instances, it’s evidence of an attitude problem. Buyers from name-brand firms may assume that suppliers are dying to do business with them. As a result, they’ll send out RFPs with little effort and expect suppliers to take the bait.

Laziness
It’s sad but true - some professionals are just plain lazy. Many buyers simply repeat the same ineffective processes again and again in an attempt to get away with doing the bare minimum. Maybe the organization has had success with RFP spam in the past? Whatever the case, falling into this bad habit can prove disastrous for both the individual buyer and the organization as a whole.

Avoiding RFP Spam

Put yourself in the supplier’s shoes. What would you want to see? What would catch your eye? Every buyer should take a moment to think about these questions before committing to an RFP.  Once they’ve attempted to see things from both sides, they’ll have a better understanding of how they can engage prospective suppliers and avoid winding up in the trash.

In training its resources, Procurement should also emphasize that there’s no such thing as a “one size fits all” RFP. By making this clear, the organization can ensure no one resource ever relies too heavily on templates or well-worn processes.

Need a little extra help? Why not reach out to the RFx Design and RFx Administration team at Source One. We’ll support you in crafting documents that won’t just reach the right suppliers, but inspire these suppliers to join your Procurement team as partners.

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on Wednesday, July 17, 2013 0
About once a year or so, I like to take the opportunity to remind procurement professionals to do your part and help cut down on a serious problem that is plaguing businesses. Each year, potentially thousands of hours are wasted and hundreds of trees are killed in order to support this old fashioned business practice. Of course, I am referring to RFP Spam.

This year, the reminder to rant about this topic came courtesy of a very large Oil company, who sent in an unsolicited RFP, and I use the term RFP very loosely. In fact, what we actually received was an email with a sentence asking for pricing to our generic info@ email box, with an attachment titled “xxxx current services RFI.docx”. The attachment itself was an unformatted job description that was obviously written by the incumbent provider that outlined all of the functions that they performed on a daily basis. The details of the RFI/RFP itself where missing (such as deadlines, expectations, requests for information about the supplier, etc.) it was simply a two page job description. To their credit, the procurement professional took the time to do a find/replace of the contractors name with “THE PROCUREMENT SERVICES CONTRACTOR”.

So, what is RFP Spam?
Simply put, RFP spam is the process of sending out unsolicited RFPs that do nothing more than create paperwork and process. RFP Spamming will not produce any positive results for any party involved. Buyers and procurement professionals are wasting the small amount of time and effort that they put into them, and suppliers will either be upset that they have to respond or will simply refuse.

Well, we’ve outlined RFP Spam it a few times in prior articles:

And we have a whole chapter in our book about it (and how to put an end to it):

But simply put, it almost always happens for a small handful of reasons:

  1. Improper training of the sourcing group
  2. Over reliance on e-sourcing tools and technology
  3. Lack of resources
  4. The false belief that your company is special (and everyone wants your business)
  5. And by far, the number one reason RFP Spam comes out….
Because it’s required because of some business process in your organization that requires a 3 bid process.


In many of these cases, those buyers or stakeholders have already selected a supplier but are required via. their own internal (or government regulated) processes to ask three suppliers to bid. Often, the buyer or stakeholder simply asks the selected supplier to write the RFP for them, so that in the small chance that another company decides to respond, they still don’t have a chance at winning the business (as the RFP will always be crafted to show the answers of the incumbent in the best light).

Although the RFI we just received in the mail was on the comically bad side of things, even the ones that a bit more effort attached to them would be unlikely to motivate us to respond.  Suppliers, especially good suppliers, have a sharp eye for what a real opportunity looks like.  Even if you're not interested in using them now, a half-hearted effort will only turn them off to future potentially engagements as well (when you might actually need them).

So if you think your organization is “doing strategic sourcing” because you take things “out to bid”, think again. There is a lot more to supplier engagement, the RFX process and the sourcing process as a whole. A generic “three bid process” ultimatum within your organization will produce very minimal results. It’s an easy process to game, and unless your management team has the time to audit everyone’s work, it’s completely ineffective.
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on Wednesday, October 07, 2015 0
I’ve been blogging about a pet peeve of mine for years, it’s time for this year’s installment: 
RFP Spam


I’ve made the argument time and time again that procurement groups rely too heavily on a rigid standardized and templated strategic sourcing process; and because of it, receive mediocre results and responses from their suppliers.   Using software tools to “automate” the process (looking at you Ariba!) often make the problem ten times worse.  (To be clear, this isn’t Ariba’s fault, but the users of it and tools like it often do not have proper strategic sourcing processes and training in place).   Time and time again we are exposed to poor sourcing practices within companies as consultants looking in; or we ourselves are invited to bid our services utilizing mandated sub-par sourcing practices and tools.  Having a rigid, structured RFP process (especially when combined with e-sourcing software) will ultimately cost you more money for the goods or services you are looking to buy.  Period.  

I will not rehash all the reasons why, I’ve don’t plenty of that in the past:


BUT, let’s nitpick the very beginning of the process that MANY of you are guilty of.   That is, creating an RFP and then inviting suppliers to respond to it without ever speaking to suppliers.   Even worse are those of you that forbid communications from the supplier during the RFP event itself, or cap conversation to basic written questions. 


Here’s 3 good reasons why you should have an open dialog with prospective suppliers throughout the RFP process:

  1. You can actually shorten the RFP process by having conversations and dialog with suppliers.  Suppliers are more likely to be engaged and treat your RFP as a serious opportunity.  This means, at a minimum:
    • They are more likely to respond with a scope of services/products that meet your needs in the first pass: shortening the RFP life cycle
    • They are more likely to be aggressive with pricing and will not just be throwing you “rack rates”: shortening the negotiation cycle 
    • They will likely put more detail, thought, and care into their response: answering questions you didn’t even know you had: shortening the scorecarding process.

  2. More Suppliers will respond.   This is pretty straight forward.   If a supplier doesn’t think they can win your business, they may not even try.   For those of you thinking “good, if they aren’t looking for our business then they aren’t a good partner” - You’re wrong.   Great suppliers, the ones that are extremely busy with work right now, aren’t going to chase business where they think they will have poor relationships.  Simply put, many suppliers would rather talk to companies that treat them as partners rather than retail stores.

  3. They may provide alternatives that you have not thought about.   You likely haven’t sourced this product or service in a while.  Even if you had, are you sure you really know every single innovation in that product?  Are you sure you are asking for the right thing or cost structure from a services supplier?   
Let’s look at this example - which I’ve seen twice in the last two weeks -   A company is looking for a consulting firm (like Source One) that can help source and benchmark a variety of categories.   They write an incredibly robust RFP document that focuses on primarily generic questions (financials, demographics, geography) and doesn’t really ask questions that would help qualify the quality of the consulting services.   They then ask for the providers to bid a daily rate pricing for consultants and attach resumes of each consultant.  In one of these RFPs, they limited questions to a simple open-forum Q&A, in the other they restricted all communications from the stakeholders and purchasing groups.  What’s the problem?   A rate card consultant on a daily plan is probably the most expensive way you could handle this engagement; you are restricted to their time, their individual experience, and you will be paying for them even during the down-time portions of your project lifecycle. There are plenty of better, ways to provide consulting support and resource that would not only be more cost effective, but would provide a better experience with stakeholders (like a managed services provider model).   


So, we have a solution for you, that is better than what you were looking for, and it costs less; but I don’t have a way of communicating it to you and your template is too rigid to allow deviation.   Worse for you, since we don’t feel that this is a real opportunity, and we haven’t been allowed to ask questions and explore your team’s thinking; we think you are simply looking for pricing to leverage your incumbent.  That means we aren’t going to even respond to your RFP.

I can’t think of any categories of situations that the sourcing process should exclude conversations with potential suppliers.   If you can think of one, please post it in the comments.   

Please help, only you can prevent RFP Spam!



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on Thursday, February 05, 2009 0
Get help, Stop RFP SpamHaving recieved four of these over the last couple of weeks, I was reminded of a topic I have been meaning to blog/rant about...

Sending out unsolicited Requests for Proposals is NOT strategic sourcing.

Let me clarify that.

  • Inputting someone's email address into your favorite "sourcing system" and letting the system send out the invitation is not strategic sourcing.
  • Finding a bunch of addresses of companies in a particular industry, cramming copies of documents into multiple envelopes and mailing them out is not strategic sourcing.
  • Filling out a templated email and blasting it to a group of email addresses letting them know that they are going to get an RFP, blasting the RFP, and then sending a follow up email blast asking why they did not fill out the RFP is not strategic sourcing.
  • Send an RFX out to companies that do not offer the product or service you are looking to buy is not strategic sourcing.

In fact, I do not think any of the above scenarios even barely qualify for "sourcing", let alone being "strategic".

Causes of "RFP Spamming"

So why do people/companies continue with this practice? There could be several reasons:

  • The RFP was just a formality. (the #1 Reason)
    The company (or the government agency) already had their selected vendor chosen, but either policy or law dictates that the RFP be sent out. In these cases it is not uncommon to see a RFP that only one company (the incumbant) would qualify for anyhow (see this).

  • Over reliance on technology.
    Many companies believe that simply because they put some expensive software into the mix that their procurement projects become magically automated.

  • Lack of resources
    The company simply does not have the peoplepower or technology to properly conduct a sourcing initiative.

  • Lack of training
    The procurement person (or team) simply does not know better.

  • Elitist or entitled attitude
    Let's face it, procurement teams sometimes get a "big head", especially when working for the government or a very large corporation. For some reason, some people think that suppliers should be tripping over themselves to win their business and that all of the hard work and effort should be the supplier's responsibility.

  • Laziness
    Unfortunate, but true, some procurement people are simply lazy, and only want to do the bare minimum to get by.

Now, chances are, if you are reading this blog, you do not fall into the "Laziness" category, so I will not even address that here. But, let's look at the reasons why "RFP Spamming" simply does not work.

The results of "RFP Spamming"

What results can you expect to see from "bulk blasting" of your RFP?
Well, the simple answer is that you can expect to see ZERO results.

You see, just as smart procurement professionals choose their suppliers carefully, smart suppliers choose their customers carefully. Good salespeople and good management teams know that 99.5% of the time an unsolicited RFP that arrives unexpectedly is not going to result in any type of business.

Marketing and sales are NOT fixed costs for businesses. That is to say, good companies do not need always need to spend 19-30% of their revenue on marketing and sales and WILL NOT invest proper resources in responding to an unsolicited request for proposal when they are reasonably confident that they will not actually win the business.

To quote a commenter on another site:

  1. Blind bids are for suckers
  2. If you don't have a relationship BEFORE the RFP, you won't have one after

The commenter goes on to suggest that suppliers should make it a condition that in order to respond to a RFP they are guaranteed a pre-brief meeting and a de-brief meeting regardless of the results of the RFP selection. This is a great suggestion, however the procurement team should be the ones initiating these discussions, you should not wait for the supplier to do so.

Some tips:

  • Do not rely on your company's Fortune 100 status to make suppliers hungry for your business.
    In fact, working for a mega-corporation often is a turn-off to many suppliers.
  • Do not rely on your $15,000/month software package to conduct the sourcing event.
    Just because you have fancy site that I can log-in to and see your specification, doesn't mean I have the desire to bid, or will even treat your bid seriously.
  • Do not rely on your free sourcing software to conduct your sourcing event.
    Same as above! We have seen hundreds of procurement professionals complain the sourcing software does not work, when their process has always been to just upload a specification, email it to 30 supplier's email addresses that they have found online and expect results. That is not a weakness of the software, it is a weakness of the process!

Now sure, some of you are going to tell me that the best supplier you ever awarded business to came from a random rfp you shot into their email box. But just think about the other suppliers that did not respond to you. One of them may have been better, but you will never know.

Granted, there a few commodity items out there that a unsolicited spam RFP might actually get you some pricing results, but it will also not provide the supplier the ability to discuss other creative ways to improve your supply chain.

Stop the Spam!
  1. Make Contacts, Make Time - Take time to research your prospective suppliers. Take time to contact your prospective suppliers. Take 10 minutes to speak on the PHONE with prospective suppliers. Make sure your prospective suppliers understand your needs and wants and that they truly do have the opportunity to win your business. Calling a prospective supplier, asking for their email address, and telling them that they are getting a RFP before you hang up, does NOT qualify as taking time to speak with a supplier!
  2. Training - If you need to learn more about sourcing and procurement in general, and would like formal training on procurement best practices, contact a trusted training partner like Next Level Purchasing

  3. Get Help - Chances are, you just do not have the resources to conduct strategic sourcing initiatives, if that is the case, get help now, hire a Procurement Service Provider, like Source One.

    Just be careful that you do not justify not getting help with any of these excuses.
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on Tuesday, January 28, 2020 0

When many people think of strategic sourcing, they think of going to market with an RFP. While many opportunities do call for an RFP, this strategy isn’t all that strategic sourcing is. Think about it from a “rectangle-is-not-a-square” perspective: An RFP is a common element of strategic sourcing, but strategic sourcing, itself, is not just issuing an RFP.

Why am I drawing this distinction? Because organizations that build their sourcing road maps for the year will do themselves a disservice by focusing on just this one tool in the overarching strategic sourcing toolbox. In fact, there are plenty of times where running an RFP may not be the best approach… at least not immediately.

When to Avoid RFPs

Towards this end, I’ve compiled a few scenarios where Procurement may wish to go a different route. If you’ve earmarked a project that sounds like one of these scenarios, take a moment and ask yourself, “is an RFP really the right way to go?”

New, Uncharted Territory

An RFP can be a great thing – when you know exactly what you want. However, many Procurement teams are challenged to identify best-in-class suppliers for products or services that are new to an organization.

In these cases, it can be difficult, if not impossible, for Procurement to develop a detailed RFP, accompanying questionnaire, or fully fleshed-out scope that will be needed for bidders to properly respond.

Look to current supplier relationships to help guide the process. While you may not have a supplier who provides these specific solutions, “nearby” providers will likely have a good understanding of the field and may be able to offer some direction or introduce you to several potential supplier candidates.

Simple, Straight-Forward Buys

Some go-to-market initiatives are simple and clear cut. Let’s say you’re buying commoditized products from a supplier you know and trust. You have no interest in changing suppliers if you can help it… but you’ll need your incumbent to come to the table with cost savings to keep your business.

In these cases, the effort of going to market with a full RFP may be overkill. At a minimum, the decision to go this route is premature. Better to find out what an incumbent is willing to do to keep your business before investing the time needed for a full market event.

Gather benchmark data and engage in direct negotiations with your incumbent. Preface these discussions by letting incumbents know that you’ll go to market if you need to, but would rather they offer a competitive enough bid to make a market event unnecessary. Armed with benchmark data, you’ll know if their opening stance is on target or not.

Complex, Multi-dimensional Offerings

The opposite of the above, some sourcing initiatives are for complex purchases that go beyond commoditized widgets. Think about finding an advertising agency of record or bringing in a tech consulting firm to do a major infrastructure overhaul. Unit price isn’t the only (or even the most important) element of successful buys, here – you need a partner who can carry your organization’s vision through into the future while safeguarding today’s operations.

In these cases, an RFP can be too myopic. An RFP does best when you can break down a supplier’s worth into very discrete/scorable qualitative buckets with a backdrop of price as a major deciding factor… complex and highly strategic relationships don’t work this way, and therefore aren’t well-served through an RFP.

Delving deep into onsite demos, pitch presentations, and planning sessions are going to be critical. Having a market event narrow the field to a handful of suppliers may be beneficial from a time-saving perspective, but don’t hang your hat on three-bids-and-a-buy solving highly complex problems.

Develop the Other Tools in the Toolbox

An RFP is a tried and true tool – however, too many organizations have relied on RFPs exclusively when other tactics may be more beneficial and require less effort on Procurement’s part. Take a deep look at the offerings being procured and the supplier relationships in play today. Select a strategy that will yield the best results – even if they don’t involve an RFP.

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on Thursday, February 16, 2017 0
Ah – the procurement professional’s trusted best friend: The RFP. This sweet mechanism is your first step to securing a great deal on your offices supplies, implementing new IT and telecommunications tools and services throughout your organization, partnering with the right marketing agency to grow your company’s brand, or improving the quality of your product by contacting a new supplier for your direct materials. Most importantly though, the RFP is both yours and contending suppliers’ way of getting to know each other’s companies and deciding if and how your companies can work together.

Think of the RFP as a first impression that you have the ability to shape based on the information you share with your contending supply base, the information you request from them, and your approach to communicating with them. Just as you’ll be using the RFP to vet suppliers, suppliers will also be using the RFP as a means for deciding whether or not they want to work with you. So, you want your RFP to set you and your potential suppliers up for success.

What Not to Do:

Overuse boiler plate language: A double-edged sword, boilerplate language can both help and hinder your RFP. While it may save time to leverage a templated RFP, often these include unnecessary information that is irrelevant to your project goals. When used improperly, boilerplate language can also send the wrong message to your contending supply base, giving the appearance of clumsy or hasty work and suppliers may not be motivated to give you’re the thorough responses you’re looking for.

     Instead… Don’t be afraid to reframe your templated RFP. Templated language serves a purpose for covering your legal basis and providing a consistent structure. Aside from that, don’t be afraid to remove components of the template that aren’t relevant to your project requirements. For example, you may be inclined to include information about your company boasting its accomplishments to give participating suppliers a better view of your company's profile. However, suppliers are only likely to skim over this information to focus on how their products and services could address your needs. As a result, the fluff you included only adds the length of the RFP and adds minimal value to the process.

Be Vague: The RFP is your opportunity to get an apples-to-apples comparison of your potential supplier. Despite this, many companies struggle to provide enough detail in their scope of work to enable a simplified comparison. Ambiguity leads to assumptions and assumptions will vary across your suppliers, leaving you with a wide ranges in pricing, service levels, and conditions to asess.
               
     Instead…Be Specific in Your Scope of Work. Think about the information your contending suppliers would need to be able to deliver a proposal (mostly) consistent in structure to the many others you'll be receiving - allowing you to conduct as close to an apples-to-apples comparison as possible. What exactly are you looking for them to provide? What processes are currently in place that you’re looking for your contending suppliers to adapt to? What capabilities do they need to have? Be as specific as possible within this section of your RFP in an effort to simplify the assessment phase later on in the process.

Strictly Limit Communication: Chances are, you’re inviting a number of suppliers to submit responses to your RFP and you probably don’t want to be constantly inundated with questions or even sales pitches. In the perfect world, your RFP would be absolutely clear and concise and suppliers would perfectly understand what you’re looking for and be able to give you clean-cut answers. The reality is, in most cases, suppliers will need to reach out to you to ask clarifying questions and completely shutting out that communication can prevent you from working with a supplier that could be a perfect fit for your organization’s needs.
               
     Instead…Open the Lines of Communication: There are ways to add structure to the communication with your contending supply base without opening the flood gates. The trick is building in opportunities to interact with these suppliers to your RFP process and taking them into consideration when developing your timeline. One way is to have them submit their questions via email with a set deadline for submissions. Once, you’ve received all of these questions you can then formulate your answers and compose a simple document with all of the questions you’ve received and then share it with the participating suppliers. This gives your contending supply-base an opportunity to have their question(s) answered and receive answers to questions they may not have thought of all -while not overwhelming you.

While designing and administering an RFP can be challenging, keep in mind that this is the first step to establishing a strong relationship with your future suppliers. Ultimately you and your supply base have the same goal of working together. Make your first impression on your future suppliers one that shows you’re mindful of their time, thoughtful of work you’re asking them to provide, and open to their perspectives and concerns.


Recognizing the importance finding and working with the right supplier or vendor, Source One is committed to sharing our know-how and insights to deliver tools and methodologies that set our clients up for sourcing success.  While you may already be familiar with our e-sourcing platform, WhyAbe.com, the world’s only free e-sourcing tool is getting a make-over. Stay tuned for how its new features will make it even easier to manage RFX events and supplier relationships!
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on Thursday, June 14, 2018 0


Over thousands of sourcing events, Source One's experts have come across every kind of RFP you can imagine. Both designing and responding to these documents, we've helped clients meet their cost reduction goals and identify the signs of a potentially valuable business relationship. Just as importantly, we've also learned when to caution our clients away from a particular organization.

Issuing an RFP - or responding to one - is an organization's opportunity to introduce itself, tell its story, and frame itself as a world-class strategic partner. For some, however, this stage is where they reveal their organization's less-than-ideal qualities. Failure to spot these red flags could leave you locked into a relationship with the absolute wrong organization.

Whether you're composing an RFP response or evaluating responses to your own request, diligence and attention to detail go a long way in avoiding inefficient partnerships and lost savings. Keep an eye out for these warning signs and you'll soon identify an organization worth pledging allegiance to.

RFP Red Flags

 Outrageous Timelines
Fast-approaching deadlines are a fact of life for most Procurement professionals. Not too many organizations are known for issuing RFPs with long lead times. Typically, organizations expect to receive responses within a month or so of distributing their request. While stressful, this is rarely cause for concern. Occasionally, however, organizations set such tight deadlines that success (for anyone) seems all but impossible.

An unreasonable deadline is more than nuisance, it's an obvious red flag that could suggest one of a few unwinnable scenarios. It's possible, for example, that the company who issued the RFP has already made their decision. With a preferred vendor in mind, they may simply have distributed the document as a formality. Or, worse still, maybe the organization is a disinterested or disorganized one altogether. Regardless, it's rarely worth the and effort to respond to an RFP like this.

Termination Clauses
Organizations will often supplement their RFPs with samples of their standard contractual clauses. It's a smart move. The RFP issuer can make sure that organizations agree with their terms up-front and avoid wasting time and money negotiating brand new contracts with their selected vendor.

Assessing contractual language, you should pay particular attention to "termination without cause" or "termination for convenience" clauses. These empower the RFP issuer to cut ties with their selected vendor on short notice without providing a legal justification. These clauses aren't always a sign of trouble to come, but you should think hard before bidding on such an RFP. Loop your legal and financial teams into the process. If winning the business would mean making a big investment in new resources, it's very likely not worth the risk.

RFP Response Red Flags

 Vagueness
Always evaluate each RFP response for signs that the agency truly understands your organization and its industry. Do their case studies lack specific details, or are they indicative of nuanced understanding and hands-on experience? At the very least, an RFP should suggest the agency did their due diligence and conducted some research.

The agency should not only reveal knowledge, but also express an interest in learning more. In follow-up conversations, their representatives should strive to fully comprehend your organization's processes, methodologies, common pain points, and unique internal culture. This curiosity and proactivity suggest a partner that will engage your organization effectively moving forward.

Failure to Follow Instructions
This one's a no-brainer. If an agency has failed to meet your requirements for an RFP response, it's rarely worth the time to even review what they've submitted. You've settled on your particular guidelines and requirements for a reason. Failure to follow them at this early stage conjures a frightening image of potential non-compliance to come.

Even your dream agency shouldn't get away with ignoring your instructions. If they've disregarded your word limits, they've wasted your time. If they've elected to employ their own format, they've shown themselves to be inflexible. Whatever the situation, it's clear this organization is not worth doing business with.

Formalizing your company's processes for developing RFPs and scorecarding responses is often the first step in identifying red flags before its too late. For some extra help, contact the Strategic Sourcing team at Source One today.

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on Friday, June 21, 2013 0
Image courtesy of Walt Disney Studios Motion Pictures

The idea of more profitable work is an alluring one for most anyone, so a phone call confirming an invitation for participation in an RFP should be something to make anyone happy. As it happens, however, a lot of people don’t like getting an RFP. A lot of people hate it. Given that they are very often the gateway to a new, potentially prosperous business opportunity, it’s strange that there is so much animosity towards these documents. The animosity likely stems from the fact that so many are assembled terribly. So let’s look at common issues with RFP’s and how to resolve them.

Hoop-Jumping

By now, everyone is familiar with the story of a mid-‘80s Van Halen lineup freaking out over brown M&Ms in their dressing room when their appearance contract specifically forbade them. The story is that the brown M&M’s provision was included as a quick way to see if the rest of the contract’s provisions were honored. Sort of a “gotcha” provision because they were dealing with different venues, contractors, and managers every night, some of whom might not want to do what’s required.

Thankfully, supplier selection is not like the mid-‘80s metal scene – if only for the lack of hairspray and Spandex – but also because all parties involved are professionals. An RFP with needlessly tedious requirements (e.g. submit one original proposal, 10 copies of the proposal, all mailed in separate three-ring binders plus seven digital copies enclosed on a 100MB Zip disk) or ultra-specific requests that don’t concern to the project involved (e.g. list three previous clients in the grape soda packaging industry when you’re evaluating TEM products that are in no way related to your soda business) read to the supplier as trivial. Including them under the guise of “We want to see which suppliers can actually follow instructions” indicates a lack of trust from the beginning and can create a sour start to any relationship.

Obtuse Formatting

When drafting your RFP, it’s important to remember what it’s actually meant to do and make sure the format follows suit. Your RFP can be a true request for a proposal or it can be the basis of a proposal itself. In the first instance, it should clearly outline what is needed in the proposal and provide at least a tentative Scope of Work in order to give respondents an idea of how they should respond. In the latter case, you’re actually providing questions to the suppliers, with their answers forming a sort of proposal. In either case, the answers are going to be evaluated at the same time upon submission.

Consider how your RFP is going to be read by the supplier, and used by those evaluating the responses, when drafting. Does your RFP include forms you would like included in the suppliers’ response? Don’t send it out as a PDF then. They require very expensive software to return them to Word/text format and the alternative, scanning, takes a lot of effort and never looks right. Is the RFP a series of short answer questions? Excel, or some other spreadsheet program, is likely the best way to present those questions. Presenting questions in a spreadsheet gives the responding supplier an easy way to track their answers, and those evaluating the answers an easy way to scorecard quickly. Spreadsheet-based RFPs requiring lengthy answers will annoy everyone involved due to spreadsheet programs limited abilities to wrap and format text across multiple lines.

Short version: If there are a lot of questions with short answers, Excel great. In all other cases, Word is likely the friendliest solution.

On the subject of RFPs, there’s one final way to ensure your potential suppliers get an RFP that’s not infuriating and actually identifies what you need: Make Your Own. 

The old adage goes “Never ask a barber if you need a haircut” – the implication being that a person in the trade of selling services is probably not looking out for your best interest – is definitely in play here. Having a service or product supplier prepare an RFP for you to identify services or products that they themselves offer is a recipe for a biased RFP.

To get the best results from an RFP and identify suppliers properly, a thorough audit of your organization’s processes should be conducted and a needs analysis performed to determine what type product or service your company actually needs. Having a person or company with a product in the market tell you what you need is a sure-fire way to learn you need their solution and only their solution will do.


Finally, did you know Source One wrote a book with entire chapters dedicated to optimizing RFPs?
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on Friday, March 25, 2016 0
So what makes the “Request For Proposal” process so special these days? The answer is simple: not a whole lot. Which in my profession is almost a wrenching statement. Over the last few years I’ve witnessed many strategic sourcing projects supported by all kinds of RFPs and their variants, “Quotation”, or “Pricing” (RFQ), or simply “Information” (RFI), and truthfully only a handful of those bidder evaluation mechanisms have proven to really effective.

In an effort for sourcing departments to vet more suppliers more quickly, and for the suppliers to be able to respond to more opportunities, both buyers and sellers have affected a massive standardization of questions, terms and responses. It may have made the process more efficient by itself, but it has not only turned the RFP process unexciting, it has rendered it ineffective.  Through the RFP, a solicitor should present an opportunity and the bidder should respond with a creative solution given its capabilities - in other words, developing a true business case uniquely drafted to address the opportunity at hand. What it really is (in most cases) is very different from this: solicitors ask a lot questions that won’t address their needs because they are either too generic or so specific that are impossible to address satisfactorily; and bidders respond with boiler plate responses to questions they’ve seen over and over.

I find that the market has been inoculated against the true purpose of RFPs, and it strikes me that suppliers are offering to provide RFP templates to the organization claiming to provide all “relevant” questions that need to be asked. I mean, how can a supplier know exactly what questions I need to ask, without even knowing what I need? That is not to say that structure and content isn’t helpful to achieve an adequate flow, or that guidelines can’t be provided to nurture the thought process; but let’s not fool ourselves, the main purpose of these template RFPs is to help bidders present winning responses to prefabricated questions. Where’s the strategic value on all this? Why waste everyone’s time on an exercise like this when I could simply ask bidders to provide me with their FAQs?

I know this sounds like an exaggeration, but the matter of fact is that I see a lot of companies running RFPs for the sake of complying with their 3 bid process requirement, and I see suppliers presenting the same responses to the same questions to everyone; then making the selection of a true business partner either more difficult and time consuming – with subsequent rounds, revisions, and complex negotiations, or just too naïve and unproductive.  

We need to get back to the purpose of an RFP as the first step in developing a relationship with a new services provider, or in re-evaluating an existing relationship – in both cases the goal being to create stronger partnerships. When viewed from this angle, it naturally means that RFPs must be approached analytically and strategically. After all, this is a Proposal request, not a FAQ request. By definition, a proposal should be the resulting recommendation to a specific need, based on capabilities resources or expertise; to this purpose, an RFP must define a need and an RFP response must present a solution that solves that need and adds value - a positive return over investment.  Though this is a much more challenging approach to the typical RFP process, it is the only one that nurtures success, true delivery, and a long-term business partnership.

Keep in mind that Supplier Relationship Management (SRM) begins with the supplier selection process; and the RFP is the first filter at which point delivery performance metrics must be established, qualitative commitments defined, and true value, not just competitive pricing, presented. In short, don’t think in terms of responses, but instead of proposals that can be measured from an ROI perspective. A properly managed RFP process will then aid in identifying candidates that are not only culturally aligned but strategically synergized. As a participant, true proposals should defy the status quo, presenting creative solutions to common problems and innovation to new ones.


Think about it, as a solicitor, when was the last time you conducted a comprehensive RFP that produced a true strategic relationship… or as a bidder, when was the last time you presented a demonstrable ROI-driven proposal, not just a response? The RFP process can be a powerful engine, a success driver, and a business enabler; but it can also be a waste of time if you approach it as “business as usual.”

Source One's RFP administration experts will be at ISM2016, where Source One is the exclusive sponsor of the Exec IN forum. Want to save on registration costs to attend this landmark event? Learn more over at SourceOneInc.Com. 
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on Wednesday, July 02, 2008 0
Strategic Sourcing professionals typically include the RFP as part of the process to effectively source materials and reduce prices. In my role I frequently review RFP documents, and have been on the receiving end of many RFP’s for strategic sourcing services. Often I find that the “one size fits all” approach to creating an RFP does not produce the best overall value or result.

For instance, I don’t know how many times I have read an RFP that asks “What are your company’s annual sales?” What does an answer to this question really tell a strategic sourcing professional? Depending on the scoring methodology, a company with $10 billion in sales that has not run a profit in 5 years and severe risk of closure could get a higher grade than a $1 billion dollar company with consistent 20% growth.

I’ve found the Yes or No approach of an RFP to have drawbacks as well. For instance, I recently saw an RFP that asked a series of Yes/No questions, including “Does your product include a Mandarin translation?” Due to the strict formatting instructions of the RFP, only Yes or No would be acceptable answers. In this case, No would be an automatic disqualification. This leaves no room for middle ground, such as “No, but the next release will include translation”.

The RFP approach should not be a substitute for understanding the market and engaging with suppliers. Often I find that upfront market research and preliminary supplier discussions will drive the questions I include in an RFP, and provide me with meaningful results I can use not only to qualify/disqualify suppliers, but to drive down pricing during the negotiation phase.

As a tactical solution, the RFP still provides backup to justify decisions made by the sourcing team, but it should never be a substitute for independent research and supplier interviews.
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on Thursday, March 27, 2014 0
Like Colorado, the government of a small country in the Pacific had recently legalized the recreational use of marijuana.  While pot smokers rejoiced, the Minister of Public Safety knew that she had a leviathan task to overcome.  Time was of the essence, and once the law was passed, she immediately contacted her procurement consulting arm, Zweisimmen & Bern, in search of an advertising and public relations agency that would be able to create an effective full-scale campaign to prevent the population from driving while under the influence.

“Quite frankly, I can’t afford to go at a snail’s pace,” stated the Minister, “The P.M.’s going to be scrutinizing my department and the increase in the number of accidents on the road, so not only do we need to find an agency that’s able to generate concern in marijuana-induced DUIs under a limited budget, but we also need to onboard this shop as soon as possible. Can you run through my list of eight agencies and complete the selection process in two and a half weeks?”

Arnold, a lead analyst at the consultancy, balked at the timeline.  Having worked for over ten years in sourcing, he was no stranger to criticisms of selection processes that dragged out too long, despite his team’s ability to wrap up the process in three weeks. Avi Dan captures the Internet’s general sentiment towards the Request for Proposal (RFP) process timeline, stating that it is “too slow for a marketing world that functions at the speed of light, and it is too wasteful for [all parties].  It can take five or six months, or even a year to finish….”

However, several factors made the two-and-a-half week timeline an unreasonable goal.  In drafting a response to the Minister of Public Safety, Arnold outlined the following points to demonstrate that a thorough selection process of this scope requires at least four to five weeks, from initial contact with agencies to picking the finalist:

Week 1: Introducing the process to potential candidates and creating the RFP.
  • It is important to spend time reaching out to potential candidates, and scheduling a brief but critical discussion where one can assess the agency’s capabilities, willingness to participate in the RFP process, as well as the their interest in committing to a relationship with the client.  Furthermore, as a standard procedure, prospective clients should screen for any potential conflicts of interest with each agency and ensure that there are no conflicts that exist with the agency’s current client base.  This way, the list of bidders can be refined.
  • Secondly, both procurement and those seeking the agency’s services should collaborate and draft an RFP that contains detailed information on the expectations of the client. A good RFP—one that will enable the bidders to craft responses that cater to the assignment—is one that does not provide only standard boilerplate information.  Boilerplate RFPs will be returned in kind, with generic answers that will make it difficult to distinguish one shop from the other.  Such a scenario demonstrates to agencies that the client did not spend the time to conduct preliminary due diligence, and so agencies, regardless of their industry, may not want to participate due to the perceived lack of engagement and poor collaborative mindset.

 Week 2-3: RFP release, briefing session, Q&A
  • Once the list of agencies is narrowed down (as a best practice, eight is too large a number for an RFP process.  A more suitable number participants is four or five, in order to for decision makers to fully process proposal materials), the RFP documents may be released.  In some instances, it may take a day or two for the team members at the agencies to regroup and determine whether they would be a good fit for the project, prior to confirming their intent to participate.
  • During this time period, the agencies will be working hard to craft a detailed response.  The client may want to schedule a briefing call with the bidders to ensure that the vision and strategic objectives are conveyed directly, and to provide the opportunity to answer any questions based on the information shared in the RFP.  To eliminate variables that cause confusion to the agencies, a briefing call may also be a good opportunity for the client to provide additional data and/or research related to the assignment.  The candidates will also be utilizing this period to perform their own research.


Week 4: Review submissions, conduct deep dive with finalists
  • Once agencies submit their initial RFP responses, it is important for the client and procurement to review the responses and select finalists from the pool of candidates. As the objective of the RFP process is to help secure a productive business relationship between two parties, one of the most crucial steps is to allow the two sides to have a direct conversation in the form of an onsite pitch presentation.  In instances where only four or less agencies are invited to the RFP process, it may make sense to go straight to a pitch presentation without downselecting.
  • In any case, agencies should be given the courtesy of being notified a few days in advance, since they are dedicating valuable resources and traveling time to be present.
  • Once onsite pitches are complete, the client may need some extra time to regroup to select the bidder. 

To conclude, Arnold explained to the Minister why such steps were important in the first place.  Given the limited budget and need for an effective campaign, it was necessary to have opportunities for the Minister to clearly express her objectives and vision to the agencies.  Furthermore, there needs to be enough time and information available to the agencies for them to convey the factors that make them the best fit for the assignment.

Simply rushing to select a bidder based on superficial factors increases the risk of selecting an partner that falls short of expectations.  This issue is, after all, quite common in today’s advertising world, where, according to a Forbes article, 67%of clients believe that the parties could be better aligned.  Ultimately, if the Minister does not allow for enough time to make a truly informed decision, time, and money may be wasted in the effort to revise work and/or select a new agency.
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on Thursday, April 20, 2017 0
Bad RFPs make your company...look bad
Being in the business of strategic sourcing (and a lot more), the team at Source One has spent decades refining the way we administer RFPs. We understand how important it is to craft documents and communicate with potential suppliers to set the stage for successful future business partnerships.

That’s why it’s particularly painful when we see other procurement service providers running bad RFPs. I’m going to share some excerpts of a bad RFP we received a couple months ago and the surrounding bad communication, which was administered by a third party on behalf of another company, whose name we were not given.

Obviously I’m not going to reproduce the RFP in its entirety or include specific names and such - not just to preserve confidentiality and anonymity, but also to be professional. My intent here is not to viciously malign, but to present a real life, pretty dramatic, example of "what not to do" in a sourcing event. It's all well and good to talk about best practices, but dramatic examples of bad practices stick out more in our minds. Humans are interesting creatures.

Anyway, this bad RFP experience began with 3 (!!) different emails to our general emailbox and a phone call to our CEO (!?) inviting us to the RFP. That sounds like them being really thorough (read: general overkill to compensate for a lack of organization) - but there seemed to be more going on here than simple thoroughness. Here is the written correspondence we received:

Bad Sourcing Team: “Please submit your response to this RFP no later than [two business days from now] as we are running this process on tight timelines.” 

Wow, two business days is a crazy fast turnaround on a consulting/services RFP. What happened? Did someone drop the ball and now the client expects their sourcing event to be completed in a week? Or is it that thing where you tell people your party starts at 7:00 when it actually starts at 8:00, so that when they are inevitably “late” by arriving at 8:00, they’re actually on time?

In any case, with a 2 day turnaround, the opportunity is highly suspect. We don't know who the ultimate customer is, and we're being asked to drop everything and respond to an RFP or else lose out on a business opportunity.

I mentioned earlier that we were not even told who the customer is, just that this RFP was being conducted by BPO Firm X on behalf of some other company. That’s Reason #2 to be suspicious of this RFP.  A closed door secret you're-not-allowed-to-know-who-we-are RFP does nothing to make a potential bidder believe that there's a serious opportunity on the table, not just a price shopping exercise.

Even when faced with these factors, Source One is not in the business of knee-jerk reactions and dismissing opportunities. Even with that tight turnaround and limited info on the customer, maybe the opportunity is worth it. We’ve responded to, and won, rapid RFPs when the services requested were a strong fit for our strategic sourcing services, and where there was a clear business case for a long-term partnership. So in this case, I thought, “Let’s not rule it out – let’s first dig into the RFP and find out what the scope is. Maybe there’s gold in them thar hills!”

There wasn't. Not even fool's gold. I'll show you in Part 2...

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on Monday, June 07, 2021 0


 In the past, the sole function of an RFP was to engage with the best supplier with the best pricing.  

Today, it isn’t just about functionality and price; the pandemic raised awareness around financial stability and diversity qualifications that should be included when it comes to the down selection process.

Is your company classified as any of the following?

  • Small Business
  • Small Disadvantage Business (SDB)
  • Women Owned Small Business (WOSB)
  • Veteran Owned Small Business (VOSB)
  • Service Disabled Veteran Owned Small Business (SDVOSB)
  • Hub Zone Small Business (Hub Zone)

    Then there are now additional “legal” questions being presented in RFP’s

  • Is your company involved currently in litigation with any company or entity?
  • Does your company have any debarment by governments or any regulatory bodies?
  • Is your company a subsidiary of another company? If yes, what company?

 Beyond the signed NDA or MNDA prior to the RFP release, there now the trend of questions/requirements in the RFP re:

    3rd Party vendors

Proof that there is an NDA between the Potential Supplier and the 3rd party vendor which includes a clause to cover confidentiality regarding work performed for any client of the Potential Suppler. 

  • Proof of any required licenses
  • Proof of insurances

 The RFP should clearly state if 3rd party vendors are allowed or not allowed to be part of the installation and or support of the product or service.  The RFP should be clear if 3rd party vendors are acceptable that they report to, are the responsibility of and paid by the contracted Supplier… there should never be invoices received directly from the 3rd party vendor.

    RFP “Company Questions” around internal employee volunteerism:

  • Does your company promote volunteering? 
  • Does your company allow employees paid time to volunteer?  If yes, how much time each year?
  • Does your company support any non-profits and if yes, which ones?

    Then there are the political related RFP questions:

  • Does your company support any political party? 
  • How does your company provide support?
  • Does your company publicly advertise your support?

     And don’t forget the company stability questions:

  • What us your company’s employee turnover rate? 
  • What has been the employee growth or decline as it relates to revenue?
  • How many acquisitions has your company been part of in the past 5 years?
  • Is your company private or publicly traded? (If public read the stock news/releases.)
  • What is your D&B (Dun and Bradstreet) number? (check it)

    Miscellaneous items to investigate about the Potential Supplier:

  • YouTube content
  • Facebook Page
  • LinkedIn Company page
  • LinkedIn page for representative, and upper management (is there a lot of company hopping by the folks that will be connected to your account?)

Depending on the type of service, you might also want to check their on-line reviews

 I had a client years ago who didn’t do this type of due diligence, signed the engagement with the supplier to only discover during roll-out their insurance policies had lapsed AND all the vendor employees on site were actually subcontractors/3rd party providers.

 When writing an RFP, the above information which has nothing to do with the service or product being sourced is of value.  No stakeholder wants to be called to the rug for a preventable situation.

If you have questions or are interested in having an RFP Sourced please contact me, twankoff@corcentric.com.

 

 

 

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on Friday, November 08, 2013 0
The sourcing process can be somewhat daunting to those who do not use it on a consistent basis in their regular work routine. Because of this, there can be confusion about what steps to take to make the most of the sourcing process and keep it streamlined and efficient so that it does not become overly, and unnecessarily, cumbersome. In the following piece I will talk a little about the differences between an RFI and an RFP and when it is appropriate to use one or the other or even both.

Let's start with the RFI. An RFI by definition is a request for information. At this stage in the sourcing process the end user is looking to gain knowledge around what the market has to offer as far as who the suppliers are and what their capabilities are. An RFI may also be used to help build out the scope of the category if the end user is unsure about what exactly they are looking for and presently only has a framework established. Depending on the category of the project and level of complexity, the RFI is likely to consist of a brief overview of the organization soliciting the information, unless the RFI is blind. If the scope of the project contains confidential information and the end user would like to collect market dynamics before establishing the next steps it may be more appropriate to submit an anonymous RFI. There are risks associated however, such as a lack of participation from the supply base and misinformation, if the suppliers are unsure of how to focus the response. An example of this would be in the marketing space, an advertising agency may have several core competencies and if they do not know the type of company they are responding to, they may not be able to present as valuable data. Other components of the RFI include a well-defined timeline, a high level overview of the scope of the project, if available at this stage, and a brief questionnaire aimed at collecting supplier capabilities. The document does not include pricing. The RFI is generally submitted to a broad base of suppliers, casting a wider net at this stage is actually recommended to increase the potential of selecting the best fitting suppliers for the next step in the process. An RFI is not needed when there is a clear scope of work, a good idea of who is available in the market, and a solid path forward for achieving a goal.

The RFP, or request for proposal, is used to solicit pricing from a narrowed group of suppliers. You can submit this type of request to a broad base of suppliers, but keep in mind that the analysis will be more in depth. An RFP can be used on its own or as a sequential step after the RFI is issued and received. The RFP can include capability eliciting questions and the request for pricing information in order to alleviate the RFI stage and streamline the sourcing process. At this stage the user likely has a clear scope of work and can include these details in the document so that the suppliers can quote the products and/ or services accurately. While the RFP is often used to seek competitive pricing or a new provider for the category, the RFP can also be used to derive new and innovative solutions to a current problem. At the RFP stage the user can indicate a clear timeline and expectations from the supplier. The user can also explain the strategy for approaching the spend category and solicit feedback to improve the strategy from the suppliers. The RFP should be thought of as a collaborative first step in the sourcing process and in building a relationship with a supplier.

The sourcing process can be very flexible depending on the user's needs and current situation. One vital piece of advice when deciding to pursue an RFI or an RFP or both, is to be prepared. Take the time to research the market on your own and understand to some degree the current supply base adn market conditions. Make sure that you have the appropriate buy-in from decision makers internally and a plan for resource allocation to assist with the RFP process.

For some useful RFx worst practices feel free to peruse my colleague Dave Pastore's post, Two More RFX Worst Practices.
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on Thursday, December 17, 2009 1
I am wondering what recent brilliant instructor/article/reporter/analyst gave purchasing managers this crazy idea that has been popping frequently...

In the last couple weeks, we have received multiple 'RFP Notifications' from unrelated companies that were looking to bid out their projects. The twist? They require the supplier (in this case, us) to pay for access to the RFP. This access has ranged from several hundred dollars to several thousand dollars, just for the right to view and respond to the RFP. And, we are not talking about government jobs, or projects that a third party or a subscription services gets a cut of (think mfg.com), we are talking plain old RFPs, direct with the buying group.

Scenario 1: We receive a 'RFP Notification' that only provides this bit of information: "XXXX company is accepting sealed bids/proposals from qualified firms to furnish the goods and/or services in the specification document. The Procurement Managed Services specifications documents can be downloaded electronically for a fee of $500. ALL PROSPECTIVE BIDDERS/RESPONDENTS ARE HEREBY CAUTIONED NOT TO CONTACT ANY MEMBER OF THE xxxx COMPANY OTHER THAN THE SPECIFIED CONTACT PERSON" (who can be only identified after purchasing the document). Now, as tempting as this is, no serious consulting firm or supplier would ever even remotely entertain the idea of throwing away hundreds of dollars to gain access to an RFP that may not even be related to their business, when they cannot even speak with or email a contact person to learn summary information of the RFP.

Scenario 2: A company that has been a prospect for a long while reaches out to us out of the blue. They are seriously considering engaging with us, but they developed what they think is a good method on how they will rank us with other providers in our industry.... They identified a specific product that they are looking to make a one time purchase of, in this case the product already has a pretty narrow list of recognized qualified suppliers (less than 5). They are going to go out to bid to the suppliers on their own and will negotiate with them in order to get the best final offers. After this is complete, they will send us the specifications (along with several other consulting firms) and want us to go back (along with everyone else) to the same suppliers and try to negotiate a better deal. They will not provide us with their pricing/efforts/information until after we submit our bids/results to them. If we come back with the best bid, compared to other consulting firms and their own efforts, then they have the option of hiring us based on their own internal qualifications, and there is no guarantee that we will be paid at all, if they feel our commission structure brings the price too close to the price they negotiated. Oh, and one more thing, they require us to pay $2,000 to make sure we have "skin in the game". So, first off, when any company assigns resource to work on an RFP, be it a consulting firm like ours that is going to assign human and electronic resources to a sourcing event, or a supplier that needs to fill out a multi-page RFP document to win business, they already HAVE "skin in the game". Secondly, the idea of sending multiple organizations out to beat up the same supplier list on the same exact items is going to produce ZERO results. In fact, it will do nothing but damage any relationship that organization has with those suppliers.

Collaboration is an extremely important component of Strategic Sourcing and your Supply Chain. This tactic of making suppliers pay for an opportunity to look at your business does nothing to help your position to develop good relationships that go beyond unit cost with your suppliers. You can have the best of both worlds, unit price reduction and improved service levels, but it will not happen by opening up communications with your supply chain with "give me money".

If you are in procurement or sourcing for your organization, please think twice before deploying these "Pay for an RFP" tactics within your organization, because they best organizations are going to respond like we did, "No Thanks". Also, if you missed it before, take a moment to read this previous post "Stop RFP Spamming!!!" I can guarantee you will not achieve the results you are looking for with either strategy.
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