Has your RFP project gone wrong?

Introductions Jennifer Foutty Jennifer Foutty –Director of Purchasing Operations –Buys: services, athletics, banking, etc. –Caveat: I’ve never done an RFP project for janitorial and sanitation services We’re going to talk about a specific project at IU, but first…. We’re going to talk about a specific project at IU, but first….

How can an RFP go “wrong”? Ethics Ethics –Collusion –Bias –Inappropriate communications Process Process –Lack of confidentiality –Unfair communication/disclosure –Playing field isn’t level –Wrong people on the RFP development/review committee

Our Project RFP for “Jan/San” for Bloomington, Indianapolis, and 5 smaller campuses RFP for “Jan/San” for Bloomington, Indianapolis, and 5 smaller campuses About $2MM in spend per year across all campuses About $2MM in spend per year across all campuses

The Landscape Had a vendor for many years Had a vendor for many years Good relationship – maybe even “cozy” Good relationship – maybe even “cozy” Good service Good service Suspect pricing Suspect pricing With the RFP, we had the opportunity to negotiate better pricing and service With the RFP, we had the opportunity to negotiate better pricing and service

Process Assigned a lead buyer from the MRO area Assigned a lead buyer from the MRO area Formed a team Formed a team –FLAG: included only users, not administrative staff Created the RFP Created the RFP –RFP document –Vendor List –Evaluation Criteria

Process (cont) Issued the RFP Issued the RFP Accepted and responded to Q&A about the RFP Accepted and responded to Q&A about the RFP Received 4 proposals Received 4 proposals Worked with the team to evaluate the proposals against the criteria Worked with the team to evaluate the proposals against the criteria

Here’s where it gets fun! Evaluation criteria Evaluation criteria –Included some items we couldn’t quantify –Included some items we couldn’t actually use as criteria –Questions on the RFP didn’t align with the evaluation criteria

Here’s where it gets fun! Evaluation Process Evaluation Process –Used a grid with numbers, but it seemed as if subjective criteria were being adjusted to benefit the incumbent –Incumbent pricing was somewhat higher AND AND –Our buyer lead left Purchasing!

Dilemma Could we quantify non-pricing criteria so that we could award to the incumbent based upon an “overall lowest cost”? Could we quantify non-pricing criteria so that we could award to the incumbent based upon an “overall lowest cost”? Could we negotiate with the incumbent for better pricing? Could we negotiate with the incumbent for better pricing? We brought in a new buyer who skillfully negotiated lower pricing so we could choose the incumbent We brought in a new buyer who skillfully negotiated lower pricing so we could choose the incumbent

Outcome Everyone was happy Everyone was happy –We got very reduced pricing from our incumbent –We chose the incumbent, and we believed they provide the best quality and service EXCEPT – one vendor protested to our Board of Trustees that we chose based upon non-price criteria EXCEPT – one vendor protested to our Board of Trustees that we chose based upon non-price criteria –We had to justify our process and outcome

Lessons Learned Prepare evaluation criteria with great care and make it quantifiable up front Prepare evaluation criteria with great care and make it quantifiable up front Reduce bias on the team by including administrative staff who aren’t users Reduce bias on the team by including administrative staff who aren’t users Ensure questions on the RFP line up carefully with the evaluation criteria Ensure questions on the RFP line up carefully with the evaluation criteria

Discussion