The Way Things Work
A few months ago, I had an experience that reminded me why I don’t like RFPs. I was on the consumer side this time, instead of on the vendor side. My job was to help concisely define the project, help select the vendors and appropriate equipment, and make sure everything was rolled out, connected, and working properly.
We decided to use an informal process to select vendors, and I figured I had enough technical expertise to evaluate the quality of all the proposals. We had a tight budget and schedule, and we didn’t want vendors to spend a ton of presales money that would somehow reflect back into the cost of the project. Also, in fairness, only one vendor would get the work, and I didn’t want all the other vendors to spend lots of time and money. I’ve poured my heart and soul into detailed RFP responses many times in the past, only to be disappointed. I didn’t want to put the losing vendors through that here.
We asked vendors to use their creativity and ingenuity to come up with an approach to the project. The vendors all submitted proposals and we carefully looked over each one. We picked a vendor and they started delivering their solution almost immediately.
That was when the fur started to fly. The same day the winning vendor started work, one of the losing vendors protested. Threats and accusations of corruption and insider dealing were cast about, and things got uglier almost by the minute.
We ended up halting the whole project in its tracks. What I found particularly galling was the vendor with the best plan got punished for being responsive and creative, while one of the losing vendors protested -- and won -- by complaining that the process was unfair and that we didn’t put together detailed bid specifications.
Where did we go wrong? I’m still trying to figure that out. Should we have done a formal RFP?
In a typical RFP scenario, the customer, often with the help of an army of consultants, works for several months or years to write detailed specifications and dozens of questions for vendors to answer. They specify the exact process and format vendors must follow when submitting proposals and they go to great lengths to appear objective. Competing bidders generally get a chance to ask questions at a public bidders’ conference, where they can submit questions formally and in public. Attorneys are often involved and various committees deliberate at length before finally arriving at a decision.
Anyone who has been involved in a major, formal RFP effort understands the problems with this process. First, it is huge project just to write a major RFP, and many RFPs are obsolete by the time they are written. Second, since RFPs presumably define everything for the project, the process allows no means of informal communication between vendors and the customer. And in more than 20 years, I have never seen an RFP that completely defined a non-trivial project.
Despite the appearance of objectivity, most RFPs are often biased in favor of one vendor because that vendor helped write the RFP. The bias is usually subtle, where a detailed specification or procedure favors one at the expense of everyone else, or where the allocated time to submit detailed proposals is ridiculously inadequate. This, in turn, contributes to intense, behind-the-scenes political battles that pit customer factions against each other and various vendors. The real decision making process is usually much more chaotic and political than anyone will admit in public. Finally, the RFP process doesn’t allow for vendor creativity. A vendor with a unique or innovative solution has no opportunity to present it because it doesn’t match the specifications.
The informal process also has its share of problems. In this case, the winning vendor lost because they spent real money and allocated real people to do a job that they earned fair and square, and then lost through political shenanigans. My customer lost because they won’t get the project done for at least several months. My customer’s customers lost because the delay inhibits my customer’s ability to expand. The losing vendor lost, even though it won its protest, because it harmed its reputation in the community by publicly complaining. Everyone involved lost, and even though we tried to be open and honest with everyone, we left ourselves wide open to accusations of improper dealing.
I’m just a skinny bald guy from Minnesota, but it seems to me that there must be a better way. How can we get things done quickly and efficiently and still be fair to everyone? I don’t have the answer yet, but I’m going to give this lots of thought over the next several weeks. I invite your comments and, when we come up with something good, I’ll present it right here. --Greg Scott, Microsoft Certified Systems Engineer (MCSE), is chief technology officer of Infrasupport Etc. Inc. (Eagan, Minn.). Contact him at email@example.com.