Hollow RFPs

August 20th, 2007

Does this sound familiar?

A contractor-client notes an increase in Requests for Proposal (RFPs). Normally lots of RFPs are a good thing. However, these RFPs aren’t what they seem.

He feels many customers are only going through the motions. They’re not honestly considering contractors’ responses. He calls these bids “hollow RFPs”, and says customers aren’t listening.

His logic goes like this:

• Enron’s, WorldCom’s & Adelphia’s corruption - led to ->
• Increased corporate governance (Sarbanes-Oxley) -which led to ->
• Customers testing contracts against the market -which led to ->
• More RFPs more often

He says the problem occurs when customers aren’t truly testing the market, they aren’t seriously working the RFP process.

Here are his clues for spotting hollow RFPs:

• No pre-qualification - any & all contractors can bid (lots do)
• No presentation - just drop off the bid doc
• No site tours
• Short turnaround times when many sites are involved
• Basic qualification questions only, nothing specific about working the site
• Poorly written RFPs; outdated, incomplete, disorganized, misspelled

You’d think contractors would respectfully decline to participate in hollow bids. But many feel they’re in a bind. If they decline to bid they’re concerned the customer will exclude them from future bids, maybe even pull existing contracts from them. Of course, incumbent contractors love hollow RFPs. They’re golden.

This idea of hollow RFPs got me thinking.

• Why might customers use RFPs that way?
• What are the costs of hollow RFPs?
• Are contractors paranoid thinking customers have evil intentions?

In response to the question of hollow RFPs, I’ve written an open letter to customers in this month’s Revenue-IQ article. In it I take a look at other potential reasons RFPs are used. And I put a few alternative solutions out there.

Look for the article in your inbox. If you’re not already receiving our monthly article, subscribe to 2) Subscribe to our FREE Monthly Article.

How often are you seeing hollow RFPs ?

~~~~~~
Chris Arlen
President, Service Performance

Technorati: RFPs, Contracts, Buying

Entry Filed under: Proposals & Presentations