This section allows the Tenderer to get a concept of what your products/services actually are, how you currently handle them etc. For example, in an RFP for freight I include the following points:
Goods – What the goods are, weight and dimensions of the average carton; smallest carton and largest carton, seasonal ordering patterns, type of product eg: flammable, perishable.
Delivery – What the average consignment consists of by volume and weight eg: average number of cartons, weight and volume. I also include where-ever possible the annual throughput ie total number of consignments with total weight and volume. It is also good to advise them of any special handing requirements.
With the above information, the Tenderers can quickly ascertain how they will approach the project. As with most agreements of this type, the bigger the pie the more they can discount, but this is just an indicator, they will still need to put costs against a desensitized sample report of consignments (this will come later in the program).
Having information summarized at this point will prompt them to quickly review specific parts of the document or ask you targeted questions, while still early into the project. Remember: if one Tenderer has requested further information or clarification, you should provide the results to all Tenderers; this will ensure the playing field is kept level and there is no risk of accusations of preferential treatment.
Next post will be – “Objectives”
A “Request For Proposal” is the issue of an invitation for suppliers to submit a proposal on specific goods or services. The RFP process brings structure to the procurement decision and allows the risks and benefits to be identified clearly upfront.
Searches on the web will also show a number of opinions that are against the use of RFPs. It seem that these opinions have come about due to a lack of correct process – RFPs being used in a scatter gun fashion soliciting responses from random suppliers.
RFPs are a structured document and should only be sent to suppliers that are already interested in providing a “proposal” to supply goods or services at an agreed quality, schedule and price.
The major benefit of the RFP (if done properly) is that it ensures all potential suppliers receive exactly the same information to base their costs and performance on, no single supplier or group of suppliers receives preferential treatment – accidental or otherwise.
Plus, if the format of the responses has been specified, comparison of the submissions can made easier, quicker and directly. In fact, if actual historical data (desensitised) has been used throughout, it will not only allow comparison of potential suppliers but also allow current costs to be used as a benchmark.
Even so, it is critical RFPs are accurate, clear and concise. Shortcuts, errors or omissions will impact on the final selection, exactly as if an RFP had not been used at all – and a wrong decision can be very costly.
Contact me if you’d like to know more.