I recently wrote about how to manage the request for information (RFI) process in the interest of identifying potential service providers for marketing related projects; this post is a followup  in which I’ll talk about the request for proposals (RFP) process. It is based on my experience working with a variety of companies and is intended to share some of what I’ve learned about the RFP process along the way.

I’ll discuss the RFP process in relation to a recent project I did with a Bay Area scientific device company, Wafergen Biosciences, for the development of their new SmartChip system. In my role, I worked closely with the project lead to select a service provider who could take on an industrial and user-interface design challenge associated with the project.

Why do an RFP?

The RFP allows you to obtain detailed information about how a service provider plans to conduct your project, what methodologies they’ll use, how long it will take, and what it will cost. Once you choose a service provider, the RFP can also serve as the basis for a statement of work contract and help transition to getting started working together.

The RFP process is ultimately about obtaining the information you’ll need to select a service provider for your project. It’s not usually just a matter of cost, but also includes factors such as past experience, work samples, process, timing, and references. If you’ve managed the RFI process correctly, all of the firms participating should be able to fulfill your project needs, the question is which one can best satisfy them.

How many firms participate in the process will depend on the nature of your project. In Wafergen’s case, the RFP was extended to four firms out of ten that participated in the RFI process. I’d say this is a fairly typical scale for medium sized companies. Going through the process is a significant investment for both participants and the company running the process, thus it’s best to limit the group size as much as possible while still covering your core range of selection criteria.

Selecting The Participants

Selecting the firms that will move from the RFI process into the RFP process can be a hard choice, but there are some exercises you can do that will help. These are all essentially ways of pulling apart the threads that form the fabric of your selection criteria:

• SERVICE DIMENSIONS- Identify the dimensions that distinguish how each firm is positioned. For example, you might have small and large participants in the RFI group which would be expressed as “firm size”. Perhaps some firms are full-service while others include partnerships. Or, some firms might have a more traditional approach while others employ agile principles.
• GROUPS – With your service dimensions defined, you can start comparing firms against each other and through the lens of each dimension. Based on the RFI information each firm provided, prioritize your choices for each dimension. A clear group may rise to the surface at this point.
• DIVERSITY – Ideally you’ll want a range of firms included in your RFP process so there will be a real distinction between your options. In other words, you’ll  want diversity with respect to at least one of your service dimensions. For example, you may have determined, through the RFI process, that the bigger firms are better suited to your project but within that group you’ll want to include a range of full-service to partnership oriented firms.

Even with a well written RFI you may need to go back to the participants to ask for additional information. After sorting though your analysis,  you should be able to clearly articulate your overall selection criteria. This will also be helpful later as you communicate with the firms that may not have been selected. Keep in mind, these firms have invested in this process so you own them feedback as to why they were not included. Plus, you never know when you’ll have another project that they might be a great fit for.

A Basic RFP Outline

The structure of an RFP will vary a bit depending on the application, but here’s a general structure to get you started:

• COVER SHEET
  • Letterhead
  • Project name & date
  • Confidentiality statement
  • Contact information
• TABLE OF CONTENTS
• INTRODUCTION & BACKGROUND
  • About your company – this is simply an expanded version of what you shared in the RFI
  • Purpose of the RFP – again, a more detailed version of the RFI purpose
• ADMINISTRATIVE
  • Technical contact – list as many relevant contacts as you need for your project
  • Contractual contact – the business contact for the project
  • Due date – A written confirmation of the service provider’s intent to respond to this RFP is required by [date] with letter of intent form (below)
  • Schedule of events – include key dates for your process
    • RFP to candidates [date]
    • Confirmation of participation [date]
    • Set capabilities presentation [date]
    • Capabilities presentation date [date]
    • Proposal due date [date]
    • Target date to review proposals [date]
    • Consultations [date]
    • Anticipated decision [date]
    • Notification to other parties [date]
    • Anticipated commencement of work [date]
• GUIDELINES FOR PROPOSALS
  • Proposal submission – sample copy: Award of the contract resulting from this RFP will be based upon the most responsive service provider whose offer will be the most advantageous to Company X in terms of cost, functionality, and other factors as specified elsewhere in this RFP.
  • Restrictions – get your lawyer to approve something like this sample copy: Company X reserves the right to:
    • Reject any or all offers and discontinue this RFP process without obligation or liability to any potential service provider,
    • Accept other than the lowest priced offer,
    • Award a contract on the basis of initial offers received, without discussions or requests for best and final offers, and
    • Award more than one contract.
  • Additional information – sample copy: There is no set format for the project proposal; however, the service provider’s proposal must cover all of the information requested below. In order to address the needs of this procurement, Company X understands that service providers may work cooperatively in presenting integrated solutions. Company X will recognize the integrity and validity of service provider team arrangements provided that: The arrangements are identified and relationships are fully disclosed, and a primary service provider is designated that will be fully responsible for all contract performance. The service provider’s proposal in response to this RFP will be incorporated into the final agreement between Company X and the selected Service provider(s). The submitted proposals are suggested to include each of the following sections:
    • Executive Summary
    • Approach and Methodology
    • Project Deliverables
    • Project Management Approach
      
    • Project Schedule
    • Detailed and Itemized Pricing
    • Method of Payment
    • References
    • Project Team Staffing
    • Company Overview
• DETAILED RESPONSE REQUIREMENTS
  • Executive summary – sample copy: Present a high-level synopsis of the service provider’s responses to the RFP. The Executive Summary should be a brief overview of the engagement, and should identify the main features and benefits of the proposed work.
  • Scope, approach & methodology- sample copy: Include detailed testing procedures and technical expertise by phase. This section should include a description of each major type of work being requested of the vendor. All information that is provided will be held in strict confidence.
  • Deliverables – sample copy: Include a list of deliverables associated with the development process through the final deliverable at the end of the engagement.
  • Project management approach – sample copy: Include the method, software, and approach used to manage the overall project and client correspondence. Briefly describe how the engagement proceeds from beginning to end.
  • Project schedule – sample copy: Include information about the anticipated project schedule, the number of required meetings, time between deliverables, etc.
  • Pricing structure – sample copy: Include a fee breakdown by project phase, showing itemized costs. Estimates for travel expenses, or other miscellaneous expenses should be included as well.
  • Method of payment – sample copy: Include information about payment amounts and times to secure services, and as relates to deliverables and/or other project phases.
  • References – sample copy: Provide three current corporate references for which you have performed similar work. If possible provide a brief summary of the project and how it relates to this RFP.
  • Project team – sample copy: Include brief biographies and relevant experience of key staff and management personnel. Describe the qualifications and relevant experience of the types of staff that would be assigned to this project by providing biographies for those staff members.
  • Company overview – sample copy: Provide the following for your company:
    
    • Key contact name, title, address (if different from above address), direct telephone and fax numbers.
    • Person authorized to contractually bind the organization for any proposal against this RFP.
    • Brief history, including year established and number of years your company has been offering services.
• CAPABILITIES PRESENTATION – sample copy: In addition to the above material, Company X expects service providers to visit Company X to present their capabilities and discuss the project in detail.
• EVALUATION FACTORS FOR SELECTION
  • Criteria – sample copy: Any award to be made pursuant to this RFP will be based upon the proposal with appropriate consideration given to operational, technical, cost, and management requirements. Evaluation of offers will be based upon the service providers responsiveness to the RFP and the total price quoted for all items covered by the RFP. The following elements will be the primary considerations in evaluating all submitted proposals and in the selection of a service provider or providers:
    • Service experience during the RFP process, including an in person capabilities presentation.
    • The extent to which the service provider’s proposed solution fulfills Company X’s stated requirements as set out in this RFP.
    • An assessment of the Company X’s ability to deliver the indicated service in accordance with the specifications set out in this RFP.
    • The service provider’s stability, experiences, and record of past performance in delivering such services.
    • Availability of sufficient high quality personnel with the required skills and experience for the specific approach proposed.
    • Overall cost of service provider’s proposal.

    Company X may, at their discretion and without explanation to the prospective service providers, at any time choose to discontinue this RFP without obligation to such prospective Vendors.

• PROJECT BRIEF
  • Summary – the summary of your project background, opportunities/challenges, and goals
  • Product/service advantages – explain the unique value propositions of your business
• SCOPE OF WORK- clearly define the scope of work so the service provider will understand what areas are out of bounds
  • Deliverables – define what you’re getting at the end of the project
  • Requirements – set clear requirement for the deliverables
  • Customer & environment profile – who will be using the product or service and in what context
  • Use pattern – define the typical or proposed use pattern
  • Production volume – how many will you need and in what time frame
  • Service profile – how often will it need to be updated or changed?
  • Competitive landscape – who are you up against and how are they differentiated?
  • Other specifications – technical or other specification information
  • Existing product service information – this is where you might share inspirations, work-flow documentation, product/service eco-systems, or other relevant information
• LETTER OF INTENT TO RESPOND TO THE RFP – sample copy: This letter indicates [service provider’s company name]’s intention to respond to the Company X’s RFP according to the specifications of the RFP by time am/pm on  [date]. My role at the above mentioned company is: [role]. I [print name] am an authorized agent of the above company. Signed by [signature] [date] Please fax or deliver to: [contact info]
  

Next Steps

With proposals in hand, you’ll want to go back into analysis mode. In my experience, it’s worth bringing the stakeholders in the selection process together to discuss the participants only after they have individually reviewed the proposals. Ideally the team will also participate in the capabilities presentations (if that’s part of your process).

How the final selection is made will depend on your organization. Usually, there needs to be some consensus between the person who will be writing the check, the person that will be benefiting, and the person who will be dealing with the day to day implications of working with the service provider. Once a decision has been made, don’t look back! Often times, assimilating outside service provider work into your organization can be a challenge, so get the momentum going by sharing your selection with anyone that might be affected by the choice.

3 Project Management Tips

As with the RFI process:

• Start a spreadsheet with all the candidates listed as you’re working your way through the process. It’s too easy to confuse candidates, contacts, and assets otherwise. For the Wafergen project, I used Google Docs to manage the process because I wanted the project team to be able to watch the process unfold, review candidates, and provide feedback.
• The way you handle the RFP process also sends a message to the candidate, so be professional, courteous, and respectful of the fact that they’re investing in the process at this point without getting paid. At the end of the process this means following up with the candidates that won’t be getting the project.
• Start writing your statement of work as you go through the RFP process. This will save you time by expediting the contract process once you select your service provider.

Good lcuk, and I hope this information is useful!