Why We Don't Respond to RFPs (Requests for Proposals)
Monday, February 13, 2012
Posted by: Michael Wyland
At my firm, Sumption
& Wyland, we avoid RFPs or other competitive bid situations. There are three basic reasons, and a couple
of "dishonorable mentions."
consulting services are inherently qualitative and difficult to assess
quantitatively. Even when results can be
quantitatively compared, the inputs may not be indicative of the quality or applicability
of the results. Even where RFPs are
usually required due diligence, most corporations and governments have an
exception for single-sourcing professional services.
RFPs are poorly written and difficult to respond to. The most common difficulty is that
organizations write RFPs designed to address problems they themselves have
diagnosed and specify processes they themselves believe to be the least costly
and/or most effective. The problem is
that, sometimes, the "patient" (organization) doesn't always
self-diagnose properly. Further, even if
they do diagnose properly, the remedy envisioned in the RFP may or may not be
the best way to address the issue.
are times when an organization uses an RFP process to provide documented cover
for a contracting decision already made.
It's often difficult to assess from the outside whether an RFP process
is truly "open," or whether there is a "preferred vendor"
awaiting a final decision. Again, since
consulting services are not commodities, even if a consultant were tempted to
become the low-cost bidder, there would be no guarantee that that strategy
would secure a contract.
addressing sham RFPs in the three reasons, because they aren't worth serious
discussion. Some organizations try
putting out an RFP to sample consultants' problem-solving approaches with no
intention (and sometimes no capacity) to sign an agreement for services. They believe they can harvest good ideas
without paying for them and implement them without assistance of the experts
who developed the ideas. Good
consultants are better off without such organizations, and are well-advised not
to waste time on them.
When we work
with a prospective client, we discuss - not propose - various strategies and
approaches to address the agreed-upon issues and goals. Our agreements often specify quantifiable
project phases. For strategic planning,
for example, interviewing all board members and selected stakeholders,
reviewing relevant written materials, conducting a board retreat, producing a
draft report, revising comments into a final report, working with staff to
develop implementation strategies and work plans, and follow-up meetings with
the board chair and CEO/ED.
discussed the processes (and their rationale) with the prospective client
first, the agreement provisions are no surprise when seen by the client. However, it's still about the activities and
how they contribute to project success - it's not about number of hours worked
or number of miles travelled. The
consultant-client conversation should be focused on outcomes and processes
rather than on inputs - it's far more productive, even when it's more difficult
With a nod to
Alan Weiss ("Million Dollar Consulting," et. al.), let's assume that
we're talking about consulting - adding value to a client's organization,
rather than contracting - providing alternate labor resources to a client's
organization. Contracting for labor is
much more quantifiable and measurable in terms of "deliverables,"
hours, and other inputs. It's a
commodity that can be selected, generally, based on price with little effect on
quality and, therefore, client mission.
consultant's "stock in trade" is their expertise, their experience,
and, often, their ability to extrapolate and see connections (leading to
solutions) where others do not. Their
value in the marketplace is their ability to use these gifts, among others, to
add value to their clients' organizations.
barrier to entry for consulting is very low, there are consultants of all
quality and effectiveness levels in practice.
Some work for large firms, some work alone; some have been in practice a
long time as a full-time occupation, while others "moonlight" from
full-time paid employment or as "fill-in work" between employment
John Ruskin quote that used to hang in every Baskin-Robbins ice cream parlor:
"There is hardly anything in the world that some man cannot make a little
worse and sell a little cheaper, and the people who consider price only are
this man's lawful prey."
Unit price is
a very poor indicator of quality or effectiveness, especially in a largely
unregulated, difficult to measure (qualitative, not quantitative) market. So
how does one assess successful negotiation?
value rather than on price. Select
consultants based on their reputation and body of work. Assess their willingness to work with you
rather than either for you or above you - neither high priests nor sycophants
make effective partners. Do they
understand and identify with your organization, its challenges and
opportunities? Do they seem able to deal
with the people - not just the issues - involved in the process and
solution? Do they represent fair value
for the money, time, and personnel you can afford to devote to the project? Do you have a sufficiently high comfort level
to believe the consultant can deliver value to your organization -- in other
words, is there a good "fit" between you?
As I said
earlier, a consultant's "stock in trade" is intimately involved in
their "body of work" and resulting reputation in the
marketplace. Successful consultants know
better than to risk their reputation for quality work in order to secure a fee
from a client who does not share that priority.
In our firm,
we seek to be neither the low-price resource nor the high-price resource. We seek to be the high-value resource for our
clients, and we seek only clients who share that goal. After twenty-one years, we have almost never
had a client engagement where cost was as major concern, either to the client
or to our firm. Where cost was a
concern, we either worked on the value proposition or adjusted the scope of
work to meet the client's limitations.
In a very few cases, we recommended they seek help elsewhere and wished
them the best of success.
L. Wyland, CSL, has over twenty-five years of experience in corporate and
government public policy, management, and administration. He is an expert on
nonprofit governance and fundraising issues featured in media including The
Wall Street Journal, CNN, Fox News, Washington Post, The Chronicle of
Philanthropy, and The Nonprofit Quarterly. Michael was recently appointed to
the newly-formed South Dakota Commission on National and Community Service.