March 5, 2013

Growing concerns with how RFPs are written

PROCUREMENT PERSPECTIVES | STEPHEN BAULD

I have been attending several information meetings at municipalities with respect to issues related to contractors trying to bid for major contracts.

At some point during the presentation from the municipal staff they mention the intent is to attract as many bidders as possible.

However, the way the documents are written would suggest the exact opposite. After reviewing the documents closely it is very clear that the way in which they are written would only allow two or three bidders to be able to bid.

It is very disturbing to see this sort of approach and after a short time contractors, and suppliers of goods and services, just stop picking up documents that are slanted towards the very few bidders that would qualify to submit a bid. Every week I am told by several vendors that they are not even picking up the documents for certain projects because the RFP is “fixed” for a certain company to win.

The main complaint is that the wording in the document is so one-sided to make sure they get the company they want to hire to do the work; it results in the true concept of having a fair and open process being completely gone. For my own satisfaction before writing this article I attended some of these information meetings to see first-hand how the process works.

The interesting point to note during these meetings was that if enough contractors stick together and complain about unfair clauses in the documents, tenders, and RFPs, the municipality will make the changes if they feel no one will bid the project. Which begs the question “why don’t they just do them properly the first time” and save all the aggravation before the process even starts?

An RFP is not an alternative for market research by the client department and buyer, nor is it a substitute for negotiation. Such research should be carried out by the purchasing and client department working cooperatively, before the appropriate procurement process is selected. The goal of that research is to identify the range of products (or services) on offer in the market, the key suppliers, the general price at which such products and services are available, the extent to which the goods or services of one supplier may be interchanged with another and the technological direction in which the market is heading, any particular risks to which the market appears to be exposed and so forth.

Where information of this kind cannot be readily obtained, a request for information (or request for expression of interest) can be used as a prelude to the RFP.

However the background market research may be acquired, this information should guide the development of the product specifications — instead of throwing in every possible one-sided clause into the document, then removing them when enough contractors complain and do not bid.

Like tenders, most municipalities specify that their RFPs must be advertised for a minimum period, generally running from 15 to 21 days. In general “The Laws of Public Procurement” would suggest that the longer the period during which the RFP (or tender) is open for bids, the greater prospect the bidders will begin to work together cooperatively against the interests of the municipality.

For this reason, any suggestion that there be an extraordinarily long period before the proposal must be submitted (such as six months — a relatively common period when dealing with design-build construction) needs to be very carefully considered.

When writing tenders or RFPs make sure you clearly review them before they are issued. An information meeting is no place to argue over clauses that should not be in the documents in the first place.

Stephen Bauld, Canada’s leading expert on government procurement, is a member of the Daily Commercial News editorial advisory board. He can be reached at stephenbauld@bell.blackberry.net.

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