Presentation on theme: "Solicitation Essentials"— Presentation transcript:
1 Solicitation Essentials 2014 CAPPO/NIGP Joint ConferenceSolicitation EssentialsTWO ESSENTIAL ELEMENTS TO EVERY SUCCESSFUL SOLICITATION:SOLICITATION PLANNING (DEFINE GOALS, DECIDE ON BIDDING STRATEGY AND SOW DEVELOPMENT)SOLICITATION EXECUTION (BIDDING PROCEDURES AND EVALUATION CRITERIA)October 9, 2014
2 Demographics1. HOW MANY WITH PROCUREMENT EXPERIENCE HOW MANY WITH EXPERIENCE IN DEVELOPING SOW?2. YOUR ROLE IN THE SOLICITATION PROCESS (HANDS ON OR …) (BID DEVELOPMENT, EVALUATION TEAM EXPERIENCE, P.M.)3. YOUR AGENCY HAVE CENTRALIZED OR DE-CENTRALIZED PROCUREMENT4. CHARTER OR GENERAL LAW5. COMMODITIIES HANDLED: CONSTRUCTION / SERVICES / IT / COMMODITIES
3 The Good The Marginal The Bad The GrowlerThe GoodThe MarginalThe Bad
4 Agenda Definitions Solicitation Planning RFx Process Specification TypesSOWSolicitation ExecutionEvaluation CriteriaScoring RFP Responses / Evaluation TeamAdditional SourcesWhy are we here?What is the evaluation team make-up?
5 Definitions Solicitation Planning GAP – Assessing difference between current state and solicitation objectives (needs)Design or Performance Specs.SOW – Statement of Work / Scope of WorkSolicitation ExecutionEvaluation Criteria – Factors specified in the RFP that will be considered for award (Mandatory/Desirable)Best Value – Determined by comparing solutions against customized criteriaLife Cycle Cost – Total cost of acquiring, support, operation, maintain and disposal (as applicable)1. GAP ANALYSIS + MARKET KNOWLEDGE = PROCUREMENT PLANPLANNING ACTIVITIES INCLUDE: DECIDEING ON BIDDING STRATEGY and SOW ELEMENTSExecution StateBIDDING PROCEDURES AND EVALUATION CRITERIABidder ConferencesOutreachCOI/Ethics
6 Planning Stage Define Business Goals Internal and/or External ExpertiseMarket ResearchGAP (Comparing Actual w/ Potential Perf.)Outsource or Insource Make or BuyBidding and Contracting StrategyStatement of Work DevelopmentGAP ANALYSIS + MARKET KNOWLEDGE = PROCUREMENT PLANPLANNING OUTPUTS:- MANAGEMENT PLAN (FTE COMMITMENTS FOR PROJECT DURATION)- STATEMENT OF WORK
7 RFI, RFB, RFP, RFQ? Request for ……. Caveat: Refer to your procurement code, rules, process, & procedures.RFI – non-binding (used to plan the next phase of the procurement not to actually procure the system, product or service.RFQ can be done prior to RFP to pre-qualify supplier capability
8 What is a RFP? Rely on Market Expertise Innovation or Creativity is SoughtShould reflect business objectives to allow matching solutionsPromotes Best Value vs. Low BidCriteria based Award DeterminationFollows a structured evaluation procedure to demonstrate impartialityA Request for Proposal is a formal invitation to potential suppliers to propose a solution to a need that the issuing organization has identified.
9 When to use the RFP method? Needed items and/or services are not clearly identifiedDepartment need is goal or results-drivenProposal requirements allow potential bidders the flexibility to respondProcurement may be political in natureRelatively high dollar amountHighly competitive marketProtest PotentialMay be determined for a multiple of reasons.Protest = Red Light example*SOW should provide a clear and thorough description of the goods or services
10 RFP Planning Checklist Did you perform market research?What are the evaluation team activities?Do you have an evaluation methodology?Do you have an evaluation guide?Do you have debriefing/protest procedures?Consultant rolesCOI & EthicsEvaluation rules of conductObtain Board/Council blessingBAFOOption proposals1. Consider recommending that evaluators score to their strengths (i.e., technical, business, etc.)2. Evaluation matrix3. Criteria weight4. Optional proposals – SaaS vs. on premise5. Procedural guides are a must.
11 What makes a good RFP?Well organized procurement goals, objectives, and evaluation processRisk management assessmentPerformance risk managementWell defined statement of workWell organized deliverablesWell defined criteriaWell defined evaluation processPerformance risk = acceptance criteria/POC
12 RFI/RFB/P/Q or Single/Sole Source? Bus sheltersHybrid busesParking lot management system projectProfessional SAP consulting servicesEnterprise Network Storage system replacementAnnual Microsoft Software supportAnnual custodial servicesMobile data computers/terminals and installationProfessional consultation servicesAfter a RFI, may have the need to develop a business case using a RFB/Q/P
13 Does the prospective bidder know which one you want? After a RFI, may have the need to develop a business case for acquisition of …
14 Specification Methods Performance vs. DesignPerformance = vendor riskDesign = buyer riskPerformance + Design = joint riskConsensus StandardsANSI, ASME, ASTM, IEEE, ISO, NIST, NFPA, SAE, ULProcurement methods.Performance based specifications focus on outcomes or results rather than process.Design specifications outline exactly how the contractor must perform the service or how the product is made.Performance based specifications allow respondents to bring their own expertise, creativity and resources to the bid process without restricting them to predetermined methods or detailed processes.
15 Statement of Work Vs. Scope of Work What is a SOW?Statement of Work Vs. Scope of WorkThe statement of work should provide a clear and thorough description of the goods or services to be provided.Whereas the scope of work should state the breadth and limitations of the contract effort and an overviewof Tasks/Work Description” and “Deliverables including any “out of scope” work.
16 Statement of WorkProvides a clear and thorough description of the goods or services to be providedProvide the relevant environment where the product/service will be usedProvides a description of the existing business processes and desired performanceShould be organized into logical groupsA statement of work (SOW) is a formal document that captures and defines the work activities, deliverables, and timeline a vendor must execute in performance of specified work for a client. The SOW usually includes detailed requirements and pricing, with standard regulatory and governance terms and conditions. The Scope of Work is included in the Statement of Work.The SOW should provide a clear and thorough description of the goods or services to be provided.If appropriate, provide the relevant environment where the product/service will be used. In certain types ofprocurements, it may be critical to describe the existing business processes. If the existing business process will changeas a result of the procurement, then also describe what the business process will be after the procurement objectivesare completed. If agencies want the respondents to suggest new business processes, ensure that this information isincluded in the solicitation.
17 SOW Format and Contents Background and ObjectivesScopeTasks / Work DescriptionProject SchedulePlace of performanceDeliverablesGovernment-furnished resourcesApplicable specifications and standardsSecurity RequirementAcceptance Criteria/Project ManagementPayment ScheduleSee next slide for picture of SOW contents.
18 Statement of WorkHow many have an existing SOW Guide?Demo/POC
19 Writing an Effective SOW Next slide = S.M.A.R.T.
20 SOW Objectives Specific Measurable Attainable Realistic Timely 1. Specific: your objectives must be clear so that if someone reads them, he or she can interpret them without ambiguity.2. Measurable: you should be able to measure whether you are meeting the objectives or not.3. Achievable: do not try to attempt more than you can.4. Realistic: do you have the resources to achieve your objective?5. Time-specific: specify when an objective will be attained (date).Next slide = Execution StageSpecificMeasurableAttainableRealisticTimely
21 Execution Stage Bidding and Evaluation Procedures Procurement Team(s) Conflict of Interest / Rules of ConductSolicitation Specific Evaluation CriteriaOutreachBidder’s ConferencesDemonstration ScriptDocumentation
22 Evaluation CriteriaMust represent key areas of importance and reflect user’s needsQualitative (subjective) and Quantitative (obj.)Always include Costs, think in terms of TCORelied on to facilitate proposed solutionsPublishedAcceptance Criteria (Demo/POC)Criteria must sync with RFP Data RequestsQualitative vs. QuantitativeQualitative (observations made using the five senses) more subjective than quantitativeQuantitative (measurable)The first step is to gather an accurate representation of the users requirements - their evaluation criteria.Don’t allow considerations outside of the published criteria to factor into award decision
23 Developing the RFP Evaluation Criteria Well developed Criteria produce market solutions targeting your needsInvolve stakeholders knowledgeable about goalsHow will responses be measured against criteriaRating ScalesScoring Phase(s) considerationDetermine relative importance (Criteria Weight)Concurrently develop the scoring matrix / evaluation worksheetUse the information from the Planning stage to pinpoint your evaluation factors tied to your main contracting objectives
24 Sample Criteria Technical Approach and Understanding Key Personnel CapabilitiesDemonstrated Successful ExperienceProject Management Plan / TimelinesRisk Assessment / Fiscal StrengthAbility to meet standardsCost (TCO)
25 Evaluation Methodology Objectives Encourage accurate comparison of potential suppliers against individual RFP criteriaAlign weighting to reflect overall procurement goalsAllow criteria to be grouped into sectionsAllow the scores of multiple evaluators to be contrasted or aggregatedEnable multiple evaluators to contribute to the scoring processCompare TCOFairness/TransparencyEnable criteria to be weighted - not all criteria are of equal importance * Allow criteria to be grouped into sections, and allow weightings to be assigned both at section and criteria level * Enable multiple evaluators to contribute to the scoring process * Allow the scores of multiple evaluators to be contrasted or aggregatedProvides consistency, discipline and rationality to the source selection process
26 Criteria Publishing Decisions Proposal criteria must be established prior to the release of the RFP and published in the RFP document. The evaluation criteria (not the weights?) were included in the RFP document.Query audience on posting criteria and/or weights.Weights?Evaluation CriteriaCompany Qualifications and ReferencesSystem CapabilitiesCustomer Service and SupportPricingRisk AssessmentTotal
27 Weighting Methodologies Fixed WeightsVariable WeightsTrade-off Analysis (overall value determined as a trade-off between technical differences and their relative worth to the agency)Go, no-go (are minimum technical and/or managerial needs met?, if yes then the proposal clears to cost evaluation)Variable weights: This weighting system allows more flexibility in the weighting of criteriawhere it is determined that, as to satisfying certain criteria, proposals are of relativelyequal merit. In such a case, the selection committee could give greater weight to other criteria. Forexample, the weight given to cost as a criterion could increase as the selection committee determinesthat the proposals are relatively equal based on other certain criteria evaluated.Trade-off analysis: determination of best value will be made by comparing the differences in the value ofperformance capability factors with the differences in the costs proposed
28 Evaluation Scoring Methods Comparing relative proposal costLow cost vs. pointsAssigning weightingTCO/Life CycleConsensus scoringDemo/POC1. The most simplistic RFP scoring method is to assign a score (1 to 10) to each supplier for each criteria.Ideally, reflect the varying importance of criteria to score each question on a different scale based on importance.2. Lowest cost vs. points = a price-based approachLowest Price Technically Acceptable (LPTA) = Used mostly by the Feds.Competitors that are graded “technically acceptable” defined in the request for proposals make it to the final round. Between these finalists, price alone dictates which proposal wins.3. Pass all the Mandatory requirements scores are given for Rated requirements = pointsThe price is calculated by comparing relative cost between proposers.*Develop standard evaluation scoring sheets.
29 Typical RFP Cost Evaluation “Normalization” Price of Lowest Cost Proposal / Price of Proposal being rated X Maximum cost points available = Awarded Price pointsExample: The total points available for cost in the RFP was fifty (50) points. The cost of the lowest acceptable proposal is $100,000. Therefore the lowest proposal cost of $100,000 would be awarded fifty (50) points. The second lowest acceptable proposal submitted a cost of $125,000. The second lowest proposal cost of $125,000 would be awarded forty (40) points.$100,000 / $125,000 = X = 40
30 Evaluation Phases Step 1 - Responsiveness Review Step 2 - Mandatory elements metStep 3 - Minimum / steps / threshold scoreStep 4 - May include interviews, demos, presentationsStep 5 - Post Award POCEx: Proposal’s receiving less than 20 points on the Project Plan will be eliminated from further consideration.Discuss variances in evaluation scores.
31 Scoring ProposalsSample Scoring Scale (0-3) 3. Exceeds requirements 2. Meets requirements 1. Minimally meets requirements 0. Does not meet requirements *Should match proposal strengths/weakness
32 Rating Considerations 90-100%: Meets or exceeds all requirements80-89%: Meets all requirements and standards70-79%: Proposal indicates a basic understanding60-69%: Proposal indicates only a marginal0 - 59%: Proposal demonstrates a significant lack ofunderstanding of the requirements.* Rating should match descriptionMeets or exceeds all requirements could also equal 70-79% Proposal indicates a basic understanding of the requirementsYou need to have agreement / understanding as to the scoring scales so evaluators are on the same pageCombined with Scoring Proposals (e.g., technical team performs 1st pass, Exec Team final pass).
33 Bad things do happen! Unbalanced and missing bid prices Bid Calculation ErrorsMaterial vs. immaterialBid price conflict between words and numbersProtestsMismatch between specifications and goalsMissing informationCommunication and politicsCheck with your legal.
34 Only One Response? Open or Not to open Call potential suppliers Review specificationsReview pricing methods/formulasReview terms and conditionsToo many projects on the table* Consult with your legal folksDid you remember to perform vendor outreach?
35 Scoring ExamplesConsider weighting the importance.
38 Score Variance – Ex1 Evaluator Proposal A Proposal B Proposal C PM StrengthsProposal BProposal CMichael25Raymond4Diana6TOTALS912Proposal strengths & Weakness0-5 Rating Scale:5 - Excellent response. Meets or exceeds reasonable expectations and requirements4 - Meets expectations and requirements with minor issues. Response lacked insight or detail.3 - Meets expectations and requirements with significant issues. Response lacks evidence.2 - Does not meet significant expectations. Response shows lack of understanding1 - Minimally meets requirements. Response is unconvincing, empty claims.0 - Does not meet requirements* Variance in evaluator scores
39 Score Variance – Ex2 Evaluator Proposal A Proposal B Proposal C Michael1410Raymond96Diana78TOTALS1720240-10 Rating Scale:Consider balancing the scores.Make sure that an evaluator doesn’t spread their scores across the range.
40 Balancing price and qualifications ProposerTotal Proposal PricePrice Proposal ScoreTechnical Proposal ScoreTotal Proposal ScoreVendor A$985,142,53070.0020.55*90.55Vendor B$1,085,111,11163.5526.1389.68Vendor C$1,365,770,09850.4927.7178.20Vendor D$1,537,049,00044.8721.4166.28Do you really want a contractor that scored the lowest in the technical evaluations?Low bid or best value?* 30 points = technical evaluation70 points = priceAbstract scoring* Test scoring
41 Differences in Total Scores Total Score (Pts)Vendor A87Vendor B*86.5Vendor C83What happens when there’s a small difference between top scorers?A re-evaluation of the vendors with near similar scores is warranted.* Check decimal placement
42 Need for Documentation Decision Maker Data RepositoryAuditor or Administrative (Board) needs should an issue arise relative to selectionFacilitates FOIA requestsFacilitates final Contract DevelopmentEX. Sharepoint collaboration.Support Board/Council approvals/decisions.
43 Recap RFP Planning Process Statement of Work Specification Types Evaluation Criteria and Scoring MethodologyDocument the Process
44 Nugget Successful solicitations always involve: Sound Planning Solid ExecutionPlanning = defined business goals, proper bidding strategy and SOW developmentExecution = bidding procedures in place, procurement teams, criteria documentation
45 Sources http://cappo.org Leginfo http://www.rfpmentor.com/ Check with your legal.