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Responding to Request for Proposals (RFP’s)

By Michael Zipursky

Before most companies decide on working with business consultants on a large scale project they’ll first ask for a round of business or marketing proposals from various consulting firms. This elimination process is called the request for proposal or RFP.

The Problem with RFP’s
While in theory this does provide you with a perfect opportunity to pick up a big project and gain a new client, there are some pitfalls you need to watch out for.

It’s not rare for the awarding company to already have a consulting firm selected in their mind before they send out the request for proposals. That being said if they are a government or public organization they are usually required to send out the RFP so that they can ‘consider’ all options.

The firm they already have in mind may be a consultant who assisted in the preparation of the RFP, or perhaps a consultant that they have worked with before, and want to use again.

This of course has connotations for you as a competitor. If you do respond to the RFP, you may find yourself going to a lot of effort, only to find that you are merely assisting the client in complying with their internal procedures, and have them award the project to your competitor in any event.

The Big Opportunity
This is not always the case though, and the RFP you receive may be a genuine attempt by a company or government organization to find and select the best candidate for the job.

These kinds of organizations tend to have an approved vendor database, and by responding to their RFP, whether you win the contract or not, you may find yourself included on this vendor list and eligible for future projects.

Of course, there is always the chance, if your proposal stands out from the rest, in terms of deliverables, expertise and price, that you will win the project.

Request for proposals are time consuming but can also be very lucrative business. So before you dismiss them as too much work be sure to weigh the pros and cons of each and then make your final decision.

How to Differentiate Your Firm
So you’ve decided to move forward and apply to win the project. The most important part of this process is that you ensure you’ve answered every question asked in the RFP with as much detail as possible.

Be careful not to add too many additional documents, even if they support your case, because the people on the other end have to read through stacks of paper as it is – and you don’t want to make their job any tougher.

The key to winning this kind of bid is to differentiate yourself from the competition. Maybe your firm has more experience than any other in this specific area. Maybe you have partnerships in place that would benefit the project. Or maybe you have access to materials that will save the company money. Create a list of all the benefits you can bring to the table and be sure to highlight them in your submission.

Pricing Your Bid
Often times consultants feel they can win these bids by placing the lowest offer. This usually doesn’t work. The cheapest of anything often comes with the cheapest image. So be careful. The awarding company may view the lowest bid as poor quality and you want your pricing to be competitive.

Questionable Ethics – Your Options
If it becomes clear, whether at the RFP or at the award stage, that there was an issue of questionable ethics involved, either on behalf of your competitor, or collusion between themselves and the client’s representative, you have two options: challenge the award, or walk away.

The first of these two is actually becoming more common. Just last night I had dinner with a lawyer from New York that specializes in helping companies win back bids that were ‘unfairly’ awarded to their competitors. The tough economic times right now have more companies doing all they can to bring in any dollars they can.

If you want to take this route, here’s how it works: Meet with a lawyer that specializes in these kinds of cases. Have them review your case and they’ll tell you whether or not you have a good chance. If you decide to move forward, you’ll have to put down a sizeable chunk of cash as a retainer for the lawyer. This isn’t personal injury law and no lawyer that I know would guarantee a successful outcome and only ask for payment once the case is won.

Once you’ve put down the cash the lawyer will go to work making your case – and they’ll often have to sue the company or government organization to allow you to win the bid. Sounds pretty messy, but it’s done every day.

You should only move forward with this option if the value of the project justifies the time and money you’ll have to invest to win the case.

If all this sounds like too much work with too little benefit you can always just walk away. Your firm’s name will at least be on the radar of the company next time they have a bid and you’ll have benefited from the experience of putting together an RFP submission.

Many consultants build their whole business through request for proposal projects. If you haven’t given it much thought be sure to contact your city or inquire with large organizations to see if they send out RFPs for consulting related work. Governments usually have websites that are updated often listing all such opportunities so you’ll want to add these to your watch list.

Have you had any experience with RFPs? If so share your thoughts below, we’d love to hear from you.

3 thoughts on “Responding to Request for Proposals (RFP’s)

  1. NELSONNIGEL says:

    this is a clean cut article, very informative, and very true. Even if you go through the process and loose 10 times, It makes you stronger, you learn more, and you will master the entire process.

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