Understanding the RFP ProcessBy: Brian Rhodes, Published on Feb 25, 2012
Dealing with RFPs (or Request for Proposals) is a major component of buying or selling video surveillance systems as large projects typically use them. The process, however, can be complex with many stages and nuances involved. In this note, we explain the RFP process, breaking down the 9 key stages of RFPs:
- Notification of solicitation
- Deciding to respond
- Prebid meeting/walkthru
- Request for Information, or offically asking questions
- Engaging manufacturers/distributors
- Submitting a response
- Bid Bond
- Bid Opening
Notification of solicitation
For an integrator, getting notice of RFPs early is a key consideration to maximizing success. Here are common options
- RFP finding service (ie: findRFP, Bidsync)
- Institutional,Municipal or Government purchasing websites (ie: fbo.gov, merx.com [link no longer available])
- 'Approved' Bidders lists - lists of eligible subcontractors manually compiled by purchasing departments. Integrators often must ask [link no longer available] to be added to these lists.
- Word of Mouth - Integrators are informed of these leads by talking with distributors or manufacturers
The sooner you get word, the better chance you have of shaping the RFP and winning the project. As such, while more time consuming, word of mouth tends to provide higher probability targets than finding a bid online.
Deciding to Respond
Responding can be very expensive. A large proposal can take several days or a week of devoted effort, from different resources in your company. A bid response requires the collabortive inputs of technical, sales, and financial disciplines. The overhead cost of issuing a quote can be significant and deflect resources from performance in other projects.
Integrators are forced to consider the project's impact on cashflow, other project obligations, human resources planning, and the net benefit of winning the opportunity. The fundamental question weighed is: Is this project right for us? This simple question can have a complex answer, unique to each opportunity. (We plan to examine this subject in a future update.)
Reviewing the RFP itself may reveal a bias toward a specific equipment vendor or integrator. Even if you proceed in issuing a reponse, can you furnish equipment at a competitive cost compared to your competition? Before moving forward with a response, many integrators will analyze the opportunity and make sure it is a good fit for their company.
Most of these opportunties will include a 'pre-bid walkthrough' of the project site or some meeting that formally introduces the project to interested integrators.
This might be your first chance to lay eyes on the customer and project. It is common to visit physical locations important to the opportunity, like proposed camera locations, data closets, and control rooms. These walk-through opportunties are vital for explaining things not easily conveyed in RFP documents.
This meeting will allow you to observe operations of the organization buying the system. This knowledge will guide you to understand which products are the best fit for the opportunity.
Request For Information, or 'officially asking questions'
To avoid the appearance of collusion or sharing valuable information to only a few parties, RFP solicitors may formally define the way to ask questions. A pre-bid meeting and walkthrough will uncover some questions that the RFP documents do not adequately answer. Your method of submitting questions will be clearly defined by the solictor.
On the backside of prebid meeting, 'official' questions are answered and distributed to group of attendees. The window to submit questions might be very brief, and the answers to those questions may be furnished very close to the submission deadline.
Engaging Manufacturers / Distributors
Not all integrators feel comfortable involving outside parties in responding to bids. The risk of having information leak out about response details keep some integrators guarded in sharing with outside sources. However, the benefit of having special pricing approved for the opportunity could make the difference in winning the job.
Very quick decisions have to be made on which equipment to propose. The sooner you contact your vendors expressing intent to propose them for the job, the better chance you have at getting the full benefit of project pricing.
Submitting a response
This step is where your previous work comes together. Working thorugh the bid package is often more than just determining a price to perform work. Information the bid package may ask you to provide include:
- citing similar project experience,
- referral letters from current customers
- occupational liscense numbers
- business credit rating report
- your business tax identification numbers and NAICS/SIC classifications
- defining a schedule of performance for the job
- describing quality control processes
- short descriptions of your company's team members
Bid bond is a surety that demonstrates willingness and obligation of the integrator to perform work. If the integrator declines to perform the awarded contract for any reason, then the integrator will forfeit the bond. This bond assures a response is serious and backed by real money. This bid bond will be returned to all bidders after bids are opened, and is simply asked to express the sincerity of a bid submission. Asking an integrator to issue a bid accompanied by the bond prevents bogus bids - random, unqualified, hasty responses - from entering consideration.
The bid bond is a check or bank note that is submitted with a bid. The amount of the check is often calculated to be a percentage of the the total bid amount. After the bids are opened, the unselected bidders have this bond returned. The winner has his bond kept until work is finished.
At the point all bids are recieved, they will be opened and compared. Sometimes this opening is held in private, and other times this bid opening is open for public viewing. Public bid openings provide a valuable opportunity to see where your company compares to competition. Even if your not entitled to a public bid opening, consider sending a request of bid results to the Project Solicitor. They are sometimes willing to share bid results with you by phone or if directly asked. Paying attention to results can help you understand how competitively you can buy certain equipment, and how competitive your labor rates stack up to competitors.
The culmination of all your hard work is the notification of award. Some type of formal notification will inform you that you are the chosen vendor. This notification of award is often accompanied by a customer's PO number that indicates you may begin accuring expenses against your newest project.