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RFP Part II: Did You See That Hole in the Request For Proposal?

From the July 2009 Issue

The much heralded Request For Proposal (RFP) that made the mayor of Birmingham, Ala. a temporary hero for saving $6M on a street paving program didn’t work quite as well for the Air Force trying to replace its fleet of KC-135s. As we saw in this column last month (www.CPATech Advisor.com/go/2347), the RFP was ideal for finding a low bid to pave streets, a relatively straightforward project.

There turned out to be more at stake than “low bid” when the world’s largest airplane manufacturers completed the military RFP for the $40 Billion worth of new aerial refueling tankers. A year later, the contract is still in limbo and the Air Force continues to nurse along its aging fleet of refueling tankers.

GETTING AHEAD OF THE COMPETITION
Although his food distribution company was a far cry from the Air Force, Bob Jones had similar hesitations about the results of his RFP aimed at replacing an aging accounting system. His 28 year-old company, focused on specialty foods with international connections, was a survivor in a marketplace that saw competitors disappear or be swallowed up. Now, Bob wanted to integrate production, sales and inventory into accounting to keep him ahead of his competition.

DEMO TIME
As we saw in the last column, four companies answered the RFP; one at $10,000 below two others. The fourth company checked “yes” to many of the RFP questions, but recommended that Bob spend $2,500 for them to learn more about his business. The RFP had identified those who could handle his project, but Bob had some apprehension about the results. He hoped that would go away when the low bidder showed him their demo.

By the time the software sales rep arrived, Bob was actually feeling better. The rep had assured his project manager, Bret, that he understood what they needed based on the RFP and proclaimed full confidence that their system would handle the accounting, shipping and inventory needs of the food distribution company. After 90 minutes, it was over. Although the rep had answers for all the questions, Bob would say later they seemed vague and he was unclear about the cost of customizations needed to handle their special inventory, production and lot number needs. Bob had also not seen some of the key reports he needed.

A demo by one of the other vendors struck Bob as a generic overview of the product. When he mentioned it, the rep responded: “We have a very flexible system. We can pretty much make it do whatever you need.”

A RECIPE FOR MISCOMMUNICATION?
Bob was back to feeling apprehension about the systems presented as he and Bret reviewed the literature. Bret favored the first company. He liked that the system could be made to do anything. Bob wondered how all those customizations would impact the investment, how they would fare during an upgrade to a new release, and he was unsure what features were standard and what were not. Their meeting was interrupted by a call from Jane, the President of Consulting Services, who submitted the RFP with the request for $2,500 up front. Bob took the call. “Okay,” he said, “tell me why I should pay you to sell me?”

After a brief introduction, the question was turned about.

“Tell me, Bob,” said Jane, offering no apologies for her company’s response. “It looked like your team put a lot of work in developing the needs list for the RFP. Did the answers from the bidders address all your needs?”

They answered the questions, Bob agreed, but then explained how his company was different and he wasn’t sure the $50K+ he was being asked to spend on a system that demoed well would meet the needs of his unique environment.