SEMINAR: How To
Create A Request For Proposal (RFP)
Announcement Outline Schedule List of Customers Terms Register
Course Outline for a 2-Day Course
Why a Request for Proposal is Created
- Buyers always have a choice to buy competitively or not
- To minimize costs or to maximize profits
- Existing contract is expiring
- It is time for an upgrade
- Service is expanding
- Recently the requirement has become important
- New conditions are imposed
- Technological changes
- Other considerations
The RFP as Part of a Complete Process
- Commonly used terms for procurement documents
- Request for Bid, Tender
- Request for Quotation
- Request for Information
- Invitation to Negotiate
- Invitation for Oral Presentation
- Expression of Interest, Letter of Intent
- Request for Pre-Qualifying Information
- Request for Proposal
- Unsolicited Proposals
Aiming for a Fair and Open Process
- All buyers require a purchasing process
- How governments implement guidelines
How Terms and Conditions are Viewed
- Aiming for predictable behavior
- End user attitudes about Terms and Conditions (T&C)
- Purchasing professional's attitude about T&C
- Government attitude about T&C
- Vendor's view of the buyer's T&C
- Current situation
- A productive attitude about Terms and Conditions
- Structuring Terms and Conditions in RFP's to optimize the value
of proposals
External Identification of RFP's
- Choosing a descriptive title for the RFP
- Organization issuing the RFP
- RFP identification number
- Date the RFP is issued
Terms and Conditions
- Terminology used in the document
- Basic privileges of the buyer
- Cost of proposal preparation
- Right to amend or re-issue the RFP
- How to obtain a copy
- The requirement for a deposit or bid bond to receive a copy
- Multiple proposals
- Where this document fits in the process
- Synopsis of the Request for Proposal
- Budget guidelines
- Proposal validity period
- Contracting process
- Limiting the time allowed to negotiate a contract
- Reserving the right to extend a contract
- Notification of intent to submit proposal
- Deadline for questions
- Proposal submission location and deadline
- Contact persons
- Vendor conference
- How proposal are to be submitted
- Language of proposal
- Size of proposals
- Structure of proposals
- Laws of jurisdiction
- Requirement for security clearance
- Applicable taxes
- Restrictions on advertising
- Former employees of buyer organization
- Vendor presentations
- Confidentiality
- Vendors in litigation with buyer
- Previously convicted vendors
- Vendors blacklisted due to past performance
- Buyer-vendor relationship
- Indemnity
- Intellectual property
- Mergers and spin-offs
- Selection is final
- Conflict of interest
- Notification of vendors
- Notification of back-up vendors
- Ownership of vendor
- Requirement for vendor pre-qualification
- Sub-contracting
- Requirement for an Executive Summary
- Requirement for the signature of a responsible person
- Requirement to be notified of a possible labor stoppage
- Insurance requirements
- Protection of workers
- Errors in a vendor's proposal
- Schedule of events
Human Resource Requirements in the RFP Creation
Process
- The RFP writing team and how the process gets started
- The proposal evaluation team
Choosing a Strategy for the RFP
- RFP's do have strategies
- Product or Straight-Replacement Strategy
- Process-Replacement Strategy
- Objectives or Resulted-Oriented Strategy
- Problem-to-Solve Strategy
- View of the strategy at different levels of an organization
- View of the strategy at different times
- When the RFP presents more than one strategy
The All-Important Selection Criteria
- How much information to provide to vendors about selection
criteria
- Aiming for selection criteria that produce acceptable results
- What to include in the selection criteria
- Assigning an Importance Index to each characteristic
- Grading process
- Grading system for for characteristics or attributes
- Completing the evaluation chart
- Determining the weight factors for each class
- The selection criteria and the buyer's strategy
Sharing Information with Vendors
- Help vendors help you
- Product dependencies
- Procedural issues
- The human element
- Political considerations
- Range of expenditure
Compulsory Requirements
- What are compulsory requirements
- Sources of compulsory requirements
- Types of compulsory requirements
- Nature of compulsory requirements
- The value of compulsory requirements in the selection process
Desirable Requirements
- The role of the desirable requirements in the selection process
- Understanding why desirable requirements are desirable
- Using desirable requirements to promote excellence in proposals
- Vendor costs and buyer's desirable requirements
Cost Considerations
- Money is always important
- Lowest cost proposals
- The two-envelope system
- Reasonably prices proposals
- Some popular approaches to balance Quality versus Savings
- Unclear, vague, or missing financial criteria
- Short-term versus long-term costs
- Uncertainty within buyer organization
Buyer-Vendor Communication
- Establishing contact with a reasonable number of vendors
- Buyer-vendor relationship during the creation of the RFP
- While proposals are being prepared
- While proposals are being evaluated
- Upon selection of the winning proposal
- During contract negotiations
- While the job is being performed
A Methodology to Put it all Together in an RFP
- Structure of Vendor Proposals
- Structuring information
- Organization of Chapters 1,2, and 3
- Organization of Chapter 4: The Scope of Work
- Organization of Chapter 5: Vendor Qualification
- Organization of Chapter 6: Vendor Methodology
- Organization of Chapter 7: Cost Proposal Guidelines
- Organization of Chapter 8: Selection Criteria
What is a Statement of Work (SOW)
- How the SOW got started
- How it is being used and abused
- The different stages of the SOW
- The relationship of the SOW to other documents
What goes into the Statement of Work
- Factors that determine contents of the SOW
- The Scope of Work, Terms of Reference
- Standards, quality, quantity
- Schedules
- Processes
- Cost issues, Remedy clauses
- Terms for acceptance
- Vendor methodology, project control mechanism
- Risks associated with the contents of a SOW
Risks and Consequences of Failure
- There is no undertaking without risk
- Living with risk
- Honest and open recognition of risk
- Methods of minimizing risk
Scope of Work, or Terms of Reference
- Starting point
- Finished product (or service)
- Deliverables at intermediate stages
- Requirements
- Specifications
The Work Schedule
- Start and finish times
- Major milestones
- Partial completion requirements
- Time estimates for units of work
- Working with a Pert Chart and the Critical Path
Process-Related Issues
- Do they matter?
- Processes and the selection criteria
Standards and Quality
- Purchase of goods
- Purchase of services
- Purchase of construction services
Further Cost and Price Issues
- Providing hints for acceptable cost
- Styles of costing
- Benefits-Driven Procurement
- Bundled and unbundled pricing
- Minimum, operational, expanded costs
- The cost of risk management
Terms for Acceptance
- How it develops into a problem
- Identifiable elements
- Follow-up activities
Vendor Methodology
- The time to think about project management
- Implement the project management system fully
- Project team membership
- Control and operation of project team
- Responsibilities of team
- Conflict resolution mechanism
- Documentation of project-related activities
- Past performance requirements
- Reference checking
Using Risks to Evaluate Proposals
- The SOW as a proposal evaluation tool
- Distinguishing between acceptable and unacceptable offers
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