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RFPs & Competition - A Home Run for All Involved
by Elena Moreland
RFPs & Competition - A Home Run for All Involved
By Elena Moreland, NASPO Senior Policy Analyst
Every purchaser, supplier, and average Joe has heard of the term RFP. RFP stands for Request for Proposals. Some jurisdictions use a different term such as Request for Responses to define the same type of competitive purchasing method. Both commercial and government procurement professionals use the term and process with various degrees to solicit competitive proposals from suppliers of goods and services.
RFPs offer flexibility by allowing for best value through negotiations and other determining factors in the evaluation, in addition to price.
RFPs are currently used in the public procurement world as a solicitation method by which competition is conducted for a contract. RFPs in the public sector are often more process-based than in the private sector to assure that the integrity of the bidding process is maintained and that competition is sought.
One of the unique features of an RFP is that after the proposals are opened, negotiations are often permitted. It is standard practice to include price considerations as an evaluation criterion for contract awards and use evaluation committees to evaluate proposals for public contracts.
A common misconception is that RFPs are onerous, especially for suppliers who want to win a government contract, but are not versed in the process. You may even hear arguments that it is not worth responding to RFPs, because the supplier may have already been chosen, or the specifications have been written such way to favor a particular supplier. In other words, the claim is that the public entity is "just going through the motions" and issuing an RFP to comply with statutory or legal requirements. In fact, state laws require that all contracts be solicited through fair and open completion and often specifically address these charges. This misconception can be disheartening and discourage small businesses from even considering competing for government contracts. While there may be such isolated cases of extremely unethical behavior, they are clearly the exception and not the norm; public procurement officers strive to apply basic principles of fostering competition, transparency, and fairness when they write policies and develop processes for public acquisition of goods and services. Many states even allow supplier the right of protest if they believe that the RFP was solicited in an unfair manner.
Many times it is asserted that RPFs are costly for governments and generate a lot of inefficiencies in terms of the paperwork, time, and the multi-step bureaucratic process that ensues. Quite to the contrary, RFPs create a competitive environment that can generate savings by considering factors such as quality, service, and life cycle, allowing the entity to public the best value versus the lowest cost. Often used on large scale projects, the RFP process ensures that the project is well-thought and efficient in all stages of the procurement process.
Additionally, RFPs ensure that public contracts are not awarded to suppliers based on unfair criteria such as a public or elected official's preference for a supplier or an agency's expressed preference to contract with a supplier solely based on trust or past performance.
Public procurement has defined processes and procedures in place which mitigate the risks for such types of unethical practices. Even more detrimental to tax payers' trust in government are extreme circumstances and unacceptable behavior by elected officials or public employees, where contracts are steered towards a preferred supplier and awarded without competition in exchange for kick-backs. Thankfully, those are rare egregious violations which are eventually sanctioned and reported by the media. This is one more reason why RFPs are the appropriate solicitation vehicles to be used to provide evidence of a fair competitive process where all suppliers have a fair shot.
One takeaway for all suppliers responding to RFPs for a public procurement is to remember that even if you don't win, you had a chance to participate in an open, fair, and transparent competitive process which would not be possible if RFPs did not exist.
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