I am managing a medium scale project, under $5M and need to run an RFP with 4-5 potential vendors. This is a services only job, all licencing and infrastructure will be handled internally, we just want to engage a consultant to implement.
My estimate is that there is about 100 hours work in doing a comprehensive response. Our likely vendor will be a mid-tier player, probably a shop with maybe 20-30 consultants.
My question is:
Would you pay a potential vendor to prepare their RFP response?
If so on what terms, i.e. the winner gets their fee deducted from the final proposal?
Or would you say that participating in an RFP is a normal BAU activity for that type of firm and they take their chances ?
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Anonymous
Dear David,
RFP is part of the process of the complete procurement cycle, its all about the vendor who would know what he has to offer you and what he cannot .this is absolutely something like making the vendor to know in advance where he stands for this particular proposal.
Its he who has to take the chance before sending his proposal against the RFP Document which is for sure a part of his buisness and therefore in my opinion nothing should be paid for these kind of services.
Hope it makes some sense!! Saving Changes...
Henry HattenrathProject Consultant| Tectonic Engineering MSA LLCNew York, Ny, United States
Based on the scope and value of the contract you present, modifying the Request For Proposal (RFP) procurement process for the Buyer to pay Sellers for proposals should not be used. It would be highly impractical to apply the process, especially if the costs are not allocated in the project estimate. Historically, Buyers and Sellers have mutually recognized that responding the RFP is the risk of doing business.
Sellers (contractors and consultants) have internal processes for evaluating the cost of RFP pursuit against the estimated percentage for winning the contract award. If the metrics do not justify the investment in a proposal response, the Seller will not commence the proposal effort. The metrics will consider several factors including: Seller competitors, knowledge of Buyer, past experience with Buyer, experience with similar scope, ability to meet qualifications, potential teaming arrangements , and discriminating factors with competing Sellers.
However, developing and producing proposal is not without cost. For significant projects with an RFP that requires special deliverables, the Buyer may have a Procurement Plan that applies the approach you suggest. It may also be more appropriate for private developer Buyers to implement this type process where competitive bidding may be limited to a list of specially selected Sellers.
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