Avoid This Common RFP Mistake to Enjoy Better Supplier Engagement

Categories : Procurement Goals | Save Time | Set Strategy Published on : May 30 2018

By: Steve Jeffery (VP of Strategic Sourcing) and Phil Bode (VP of Training), 4 Degrees North

During the sales process, suppliers often ask the customer questions, research the organization and learn as much as possible to qualify the customer and any potential opportunities. Suppliers do this to avoid wasting time dealing with customers who: are on a fishing expedition, are just gathering information, are merely complying with a policy that requires getting at least three bids, don’t have adequate funding or simply aren’t a good fit for the supplier.

When it comes to requests for proposal (RFPs), customers should take a page out of the supplier’s book. Don’t make the mistake of assuming that suppliers will beat down the door to be part of the RFP process – this is a mindset that can limit your chances for a successful project. Instead, qualify the supplier’s interest in participating in the process well before issuing the RFP.   

Luckily, we’re not talking about a lengthy fix to this common mistake. There are two easy ways to quickly qualify the supplier’s real interest.

  1. Ask in the RFI

If your organization intends to issue a request for information (RFI) before publishing the RFP, insert a paragraph or two at the end of the document to give the supplier the chance to opt-in (or out) of the opportunity. Here is a sample to guide you:

 “At this point, Customer intends to evaluate the responses to this RFI and determine whether to issue an RFP for the [insert project name from the RFI]. Based on the information contained in this RFI and your understanding of the project, would you like to participate in the RFP process for this project?

Although your answer is not binding, please indicate “yes” only if you are serious about submitting a thorough and complete proposal if you participate. An answer of “no” will not be held against you or prevent you from being considered for other projects in the future. In fact, your honesty and candor will be greatly appreciated. If you answer “no,” please provide a brief explanation for your answer and contact information for an individual who could provide greater detail if required.”

 

      1. Ask in a meeting

If your organization does not intend to issue an RFI before publishing the RFP, ask the supplier if they’re interested in participating in the project during a meeting. Chances are you’re already meeting regularly with most of the suppliers you’re considering for the RFP. You’ll need to provide enough details for the supplier to evaluate the fit, and you may have to wait a day or two for an answer. In fact, waiting a day or two is better, because getting an on-the-spot response like, “Of course. We’d love to,” may spell trouble down the line. So, encourage the supplier to evaluate the opportunity fully before responding. Without this time for contemplation and evaluation, you’re likely to get the answer the supplier thinks you want to hear rather than the answer you need to hear.

The same strategy is in play here that was outlined above. You want to make the supplier feel comfortable with a response of “no thanks.” Proposals submitted out of obligation or fear of impacting the relationship are seldom valuable to the customer, they often waste time, and ironically end up negatively impacting the relationship.

Finally, as a word of caution, there is a difference between asking whether the supplier wants to receive your RFP and whether the supplier wants to participate. As a customer, you are looking for participation. Qualifying your suppliers before issuing the RFP will save you time and help you avoid some potentially embarrassing situations later in the process.


Watch our webinar where we discuss 5 more common RFP mistakes and how to fix them. We look at each mistake, the issues associated with that mistake, and some practical solutions to help you improve your RFPs immediately.

Click here to watch the webinar.



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