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What’s Valid On An RFP?

June 20, 2009

SpendMatters raises an interesting debate about the validity of  questions in an RFP. It highlights an RFP for legal services which apparently contained the following questions:

– Whom do you regard as your major competitors?
– How do you compare your firm or company against your major competitors?
– What are your key strengths relative to theirs?
– What is the contact information for one client that has ceased to do business with you within the last two years?
– What are the attrition rates over the past two years among your employees who would be working on our matters?

In his article, Rees Morrison describes these questions as “blatantly intrusive and unfair”.  I do not agree.

First, I do not think such questions are new – I have come across similar requests in many RFPs. Second, I think such questions are not only right, but in fact are probably welcomed by many suppliers.

The steady move to a services-based economy has made the task of validating quality of supply significantly harder. Suppliers make claims about outcomes that are very hard to test or prove and it can be tough to evaluate relative performance of providers. So wanting to know what you really think are your distinctive features and benefits against the companies that you view as yoru competitors is entirely valid. Indeed, the question regarding who you see as your competitors is in itself very revealing. As a supplier, do I cite the poor performers in my market (risking guilt by association), or do I highlight those who relay scare me?

Service providers depend entirely on the quality and motivation of their staff. Generally they make much of the strength and depth of those staff, the investment in training, the specific knowledge or skills they bring. So asking about attrition is a smart thing to do. It is no more offensive than asking about typical product lifecycles or withdrawal policies.

As someone who often replied to RFPs, I welcomed questions like these. They gave an opportunity to describe strengths and make points about differentiation that was otherwise often lacking. The only time I would not want to give answers would be if I had no source of differentiation, or if my attrition rates were awful – and in that case, I guess the customer was pretty smart to ask.

What do you think about these questions? And are there other examples out there of really good – or really bad – RFP questions?

6 Comments
  1. Diane Homolak permalink

    Tim, I respectfully disagree with the appropriateness of RFP questions like some of the examples in this article and further question the value of responses that such questions would yield. While the first question looks innocuous enough, listing competitors, if a little known but viable competitor is out there, what vendor would find it in their interest to point out such an alternative in a bid situation. If they say nothing they can always claim they don’t see them as a competitor and the buyer will not have learned anything new.

    Similarly, comparative requests will not be answered by any reputable vendor. No legal department worth its existence will permit comment on a competitors capabilities because to do so would risk slander claims. RFPs already provide the opportunity for vendors to highlight their own strengths and most will naturally highlight those areas where they have unique capabilities. It is not necessary nor would it be legally advisable to take that one step further and provide a comparison. The most that might be provided is a link to published comparative adverting which is already sanitized and will not provide the buyer with anything not already available in the public domain.

    Attrition rates are proprietary information protected to safeguard the morale and performance of existing troops and to give Management a benchmark to maintain or improve upon. The only really helpful data here would be at the organization level supporting the particular type of work and this might not even be available in large organizations. While it would be tempting to provide such information if the numbers were favorable they could also become self-fulfilling prophesies if they were less favorable but perhaps turning around before publication. For select key situations such as outsourcing, a question like this could be helpful and is probably data readily available as a comparison to industry norms but to include such a request in a general services environment is not as meaningful because part of buying general services is bench strength to deal with churn overtime. Vendor service providers are all of similar skills and sufficiently available that a qualified person is always available irrespective of departures.

    Better than relying on vendor claims, Buyers need to own their own research. There are industry groups not unlike IACCM who can provide insights on reputable vendors and competitor performance and provide a more objective and reliable source then a vendor’s self-serving and sanitized claims. Such questions while tempting on their face actually provide minimal response value in how they will play out.

    • Catherine Uffen permalink

      Attrition rates are critical to the preservation of confidentiality. Security scores on organizations with few temporary employees are higher.

    • Catherine Uffen permalink

      The question about who your competitors are might be better handled in an RFI that precedes the RFP.

      It might be more relevant to the buyer to ask the supplier to describe briefly two recent bids that they have won or been shortlisted on and the value difference between their proposal and their competitors.

  2. Tim I agree with your comments. I have seen these questions on a number of occassions and have no problem responding to them. Although I do think that some organisations include this line of questioning simply because they are to lazy to do any market research and analysis, many use it to supplement their own research and analysis and therefore gain a more complete and representative picture of the playing field.

  3. Catherine Uffen permalink

    Question:
    To the best of your knowledge,
    1. Is any affiliate of your company bidding in competition with you on this RFP?
    2. Have any of your personnel or any personnel of your affiliates participated, or will participate, in the creation of this RFP or evaluation of the responses to this RFP?

    I propose this question because while working on an RFP with a former employer we had a situation where
    a) a parent company and its subsidiary were each responding separately and in competition; other bidders simply did not believe that they would keep a secure firewall between the entities – there was an appearance of conflict
    b) a consultant of the parent company was engaged “free of charge “by a senior executive to assist in gleaning information from all of the RFP responses for an imminently required strategic proposal. The parent company stated that it keeps a firewall between its consultants and its other divisions but again, but its agreements with us didn’t provide assurances of confidentiality in that situation.

    • Hi Catherine

      To answer your questions 1 and 2:

      1) No
      2) No

      Any answer to the contrary would raise Governance issues.

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