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This snapshot is taken from our new 400-page reference text, The Request For Proposal Handbook (Third Edition). This book focuses on best RFP practices that will help you be successful. Chapter 8 of The Request For Proposal Handbook (Third Edition) discusses the nine building blocks of the evaluation process.
Hear what the President of NASPO says about this book . . . “Michael Asner's book removes a lot of the RFP process mystery. It is one of very few RFP books that address the negotiation process. I refer to Mr. Asner's book often and it is recommended reading for public procurement officers.”
In reviewing a large number of RFPs, we identified nine different components of the process, such as reviewing a proposal for compliance with mandatory requirements, or interviewing the suppliers. We refer to each of these components as a building block:
ESTABLISHING COMPLIANCE Typically, evaluators establish compliance before doing the more detailed analysis. During this step, one or more evaluators review each proposal to ensure that all of the mandatory conditions have been met. A mandatory condition is a requirement that must be met without alteration. One example is the submission of the proposal by a specified time. If it is late, it is usually returned to the supplier unopened. Another example is a requirement that the supplier must provide 24-hour emergency service. To ensure that vendors do not miss mandatory requirements scattered throughout the RFP, all of the mandatory requirements are often identified in one section of the RFP. Many evaluators are uncomfortable eliminating a supplier from further consideration for failure to satisfy a mandatory condition - especially when the evaluator believes that the requirement is, in fact, only "highly desirable" and not really mandatory. Mandatory requirements must be precisely defined and must be essential elements in the success of the project. For example, consider the following mandatory requirement: "Suppliers must have a local service office." Now, I presume that the concern of the purchasing organization was prompt service and travel time. As stated, this requirement is poorly defined and could cause a number of problems for the evaluators. First, the RFP didn't state the type of service required. Was it for equipment repairs, software support, or network support? Second, no service levels were given. Did they need 8-hour per day support? Or 24 hour support? Third, no mention was made of the level of expertise required locally. Did they require a very expensive, technical expert who might only be found at the supplier's head office or development facility? It is awkward, risky, and sometimes embarrassing to declare a proposal non-compliant when the mandatory requirement was not stated precisely and could be interpreted several ways. In these cases, evaluators often declare all proposals compliant, examine the actual requirement more closely, and seek clarification from the suppliers. Evaluators often ignore ambiguous mandatory requirements and evaluate each proposal on its merits. Some RFPs declare that 'proposals not meeting all mandatory requirements will be rejected'; others are less clear and state that 'proposals may be rejected'. The use of the word 'may' rather than 'must' permits the evaluators some latitude. They can waive mandatory conditions which all suppliers failed to meet. They can also waive mandatory conditions which on close examination during the evaluation process have proven to be ambiguous. In California, one organization[i] permits the evaluators to give proponents an additional 72 hours to meet mandatory requirements when “. . .(i) the Proposer gains no advantage from the opportunity to correct the deficiency; and (ii) other Proposers suffer no disadvantage.” When 'may' is used, the principle of treating each supplier fairly must prevail. Evaluators should expect complaints and protests from suppliers eliminated for failure to comply with a mandatory condition that was ambiguous, or not an essential part of the solution. As a result of this process, each proposal is declared to be either compliant or non-complaint. Compliant proposals are evaluated further. Non-compliant proposals are eliminated from the competition after preparing a memo for the project file, and for senior management (in anticipation of a protest). Often, discussions are held with legal counsel before eliminating a proposal. Definitions are Important To ensure that suppliers understand the significance of key words such as 'mandatory', many RFPs define the term and indicate that it will be identified by use of the word "must". Here are the definitions used by the State of Definition of Key Words Used in the RFP Shall,/Must: Indicates a mandatory requirement. Failure to meet a mandatory requirement may result in the rejection of a proposal as non-responsive. Should: Indicates something that is recommended but not mandatory. If the vendor fails to provide recommended information, the State may, at its sole option, ask the vendor to provide the information or evaluate the proposal without the information. May: Indicates something that is not mandatory but permissible. The State of MANDATORY REQUIREMENT DEFINED A mandatory requirement (MR) is an essential need that must be met by the vendor. L&I (Dept. Of Labor & Industries) may eliminate from the evaluation process any vendor not fulfilling all mandatory requirements. Failure to meet a mandatory requirement (ground for disqualification) shall be established by any of the following conditions: C The vendor states that a mandatory requirement cannot or will not be met. C The vendor presents the information requested by this RFP in a manner inconsistent with the instructions stated by any part of the RFP. C Customer references report the vendor=s inability to provide average (satisfactory) service or to comply with one or more of the mandatory requirements. C The vendor's references fail to send the customer reference forms as required, and/or by the time required. C The vendor fails to include information requested by a mandatory requirement. Helping the Vendors Keep Track of Mandatory Requirements It is both a common practice and a "best practice" to summarize all of the mandatory terms on one page in the RFP and reference the pages which describe each of the requirements in more detail. This summary, often in the form of a table, can be used by vendors to ensure that they have dealt with each mandatory requirement. Often, mandatory requirements are distributed throughout the RFP. Some may be obvious but others may be buried in the middle of a page. These ones can be missed, even when the RFP is read several times. It is unfortunate when a vendor simply fails to identify a particular mandatory requirement and is eliminated from the competition. The use of this table summarizing the mandatory requirements helps ensure that vendors do comply. Promoting the Development of “Within Budget” Proposals Often, "within budget" is a critical requirement but not defined as a mandatory condition. Suppliers are not always told the budget and this can present difficulties. There are several different approaches to handling this problem. Obviously, publishing the budget is the best but there are some compelling arguments raised against it in many jurisdictions. If your organization does not publish the budget, then it must include language in the RFP which indicates the type of solution you are seeking or the importance attributed to cost. For example, "we are looking for an economical solution" or "Cost is the overriding consideration". Another way of giving vendors direction about the significance of the budget is through the weighting. If “cost” receives 70% of the points and the least cost gets 70%, then you are telling vendors to submit an inexpensive proposal. If, on the other hand, cost only gets 20%, then you are telling the vendors that technical and management considerations are far more important than the cost. Here is what one jurisdiction tells its purchasers if all the proposals exceed the unpublished budget: When this happens, your (organization) may appear to be incompetent and ill-prepared, but you can reduce the impact on your organization. You have two alternatives: - cancel the procurement and perhaps also the project for which the procurement is being done; or, - review your requirements and reduce them to the essential needs to be met. This will mean a new competition, with a new requirements document and all the inherent delays and potential for complaints from the supplier community. Some jurisdictions do not permit significant changes to the RFP or proposal through the negotiation process. For these, it is not proper, usually contrary to written policies, and sometimes illegal to identify the winning company and then approach them to determine how much of their solution they can deliver, not for their proposed price of (for example) $100,000 but for the budgeted amount of $50,000. Make sure you understand the business case for the project since a procurement is part of a project. Ensure the project plan is well thought through. Assure yourself that suitable technology products and services are available at the prices you anticipate - before you finalize the project plan. This knowledge of products and services can be gained by talking to industry contacts, suppliers, and other organizations about suitable products and services before completing the development of the RFP document. Ensure your requirements document contains only specifications that truly reflect program needs. Include a tentative amount in the RFP. For example, a statement such as "we anticipate that the winning supplier will propose a solution whose total life-cycle present value cost is between $1.0 million and $1.3 million". This information will ensure that suppliers do propose solutions which are affordable, if those solutions exist. Alternatively, structure the RFP so that the supplier proposes a solution which can be expanded as needed. For example, suppose you want to acquire services related to developing a complex training system, or training people. Your RFP could ask for a proposal to develop "UP TO" 3 training modules, or to provide training for "UP TO" 200 people, or a treatment program for "UP TO" 15 people. In this way, you can obtain a proposal for the product and select the quantity that is affordable. Some Requirements are Only Highly Desirable, not Mandatory The ‘best practice’ is to keep the list of mandatory requirements short and to take great care to define each requirement precisely and unambiguously. Many stakeholders view their most important requirements as mandatory when these requirements may be only highly desirable. Often, the decision to define a requirement as mandatory contains an element of discretion. Do we define a mandatory requirement that the vendor is a large company or do we evaluate the capacity of the firm to do this work? Do we insist that the company have an office within five miles of our building or do we evaluate the ability of the firm to get to us quickly in case of an emergency? For example, the State of . . . While (a) Your organization, either alone or teaming with other entities, has entered into at least one IT services contract for the provision of IT services where the annual contract value exceeded $50,000,000; (b) Your organization, either alone or teaming with other entities, has provided services in at least six of the eight services categories described in Section 4.5 of the RFP; and (c) Your organization has had average gross annual revenues in excess of $1 billion over its three latest fiscal years. The foregoing criteria are only guidelines provided for your consideration, and Proposals will be formally evaluated as otherwise stated in this RFP . . .
The entire 400-page book focuses on how to create effective, low-risk RFPs. You will learn about best practices that will help you be successful.
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