1. Bullet-Proofing Your RFPs

2. Welcome Michael Asner Consulting Suite 2003 1028 Barclay St.
Vancouver, BC
Canada V6E 0B1

3. Handout Material
Notes

5. Agenda 1 – Procurement is a zoo! 2 – What can go wrong?
3 – The view from 30,000 feet (world wide issues)
4 – The view from 20,000 feet (RFP issues)
5 – The view from 10,000 feet (The Evaluation Process)
6 – My five favorite problems
7 - Conclusions

6. Procurement is a Zoo!!!! 1.

7. Emergency!!

8. Sole Source

11. Tender
RFQ
ITB
ITQ
 A tender is used when the purchaser knows exactly what good
or service they want and is looking for the best price to deliver
it. 11 11

12. RFPs……

14. When to Use an RFP
Types of Procurements

15. What can go wrong? 2.

16. Procurement IS the news at 6 p.m.

18. There are NO valid proposals!

19. Management INTIMIDATES the Evaluators!

20. The view from 30,000 feet 3.

22. A World Wide Trend
FAIR
OPEN
TRANSPARENT
BEST VALUE

23. fair
 • adjective 1 just or appropriate in the circumstances. 2 treating people equally.

24. open
• adjective 1 allowing access, passage, or view; not closed, fastened, or restricted.

25. transparent
• adjective 1 allowing light to pass through so that objects behind can be distinctly seen. 2 obvious or evident.

26. best value
???????

27. The view from 20,000 feet 4.

28. The RFP Document

29. The RFP Process Developing Specifications Forming an Evaluation Team
Issuing the RFP
Vendors’ Meeting
Evaluating Proposals
Finalizing the Contract
Preparing for Public Inspection

30. Choices in Selecting an Evaluation Methodology
Do we compare proposals only with the defined requirements, or do we compare them directly with each other?
Approach #1:
A Comparison With Requirements
Approach #2:
Comparing Proposals Directly 30

31. Choices in Selecting an Evaluation Methodology (cont’d)
Which rating method do we use?
► color coding
► adjectival rating
► ranking
► numerical scores and weights
► non-numerical scoring 31

32. Real World Examples State of Montana: Evaluation Process
Review all proposals.
Determine status.
Score proposals.
Discuss proposals.
Interview.
Conduct discussions/negotiations.
Obtain best and final offers.
Prepare recommendation.
Review documents. 32

33. The view from 10,000 feet 5.

34. Inside the Evaluation Process
The Building Blocks of The Evaluation Process 34

35. What the Courts Have Said

36. DUTIES on OWNER Duty to disclose Duty of Fairness
Duty to Award as Tendered
Duty of Fair Competition
Duty to Reject Non-Compliant Tenders

37. Constructing the Evaluation
The Building Blocks of The Evaluation Process
Establishing Compliance With Mandatory Requirements
Scoring the Proposals
Imposing Upset Levels
Evaluating the Cost
Developing a Short List
Interviewing Suppliers
Negotiating the Contract
Requesting Best and Final Offers
Using References/Past Performance 37

38. 1. Establishing Compliance With Mandatory Requirements
Be precise, legalistic.
Establish the rules for rejecting proposals.
Definitions are important. 38

39. Establishing Compliance With Mandatory Requirements (cont’d)
Best Practices
Put Definitions in the RFP.
Provide a Table of Mandatory Requirements in the RFP.
Publish the Rules for Rejecting a Proposal in the RFP.
Restrict the number of Mandatory Requirements. 39

40. 2. Scoring the Proposals
Evaluation Factors
Weights
Scoring Systems 40

41. Evaluation Factors (Criteria)
Families of criteria
Technical
Management
Cost
Effective Criteria
Objective
Related to the requirements definition
Discriminating
Non-discriminatory
Measurable
Economical to use 41

42. Weights
Determining the Weights
Publishing the Weights 42

43. Scoring Systems The Bar Can’t Get Any Lower! An Excellent Approach #143

44. The Bar Can’t Get Any Lower!
10 - Excellent - meets all requirements/very desirable
7 - Good - most requirements met, it is good enough
4 - Satisfactory - some requirements met, not sufficient
1 - Unsatisfactory - requirements essentially not met 44

45. An Excellent Approach #1
Air Force Regulation 70-15
If the majority of the (sub)factors evaluated meets standards, the requirement is not overly difficult to meet, and the (sub)factors which are deficient are of a very minor nature or are susceptible to easy correction, the item should be scored "5". 45

46. An Excellent Approach #2
Ontario Government
Factor 2: Project Team (Weight = 40)
1. Project Manager is experienced in all 3 key areas
2. Project Manager has managed large, similar projects
3. Key assistants (2 or 3) are experience in 3 key areas
4. Extra (contingency) resources are available
5. Two or more specialist to assist team
6. Experience with a similar system
7. Commitment/dedication of resources 46

47. 3. Imposing Upset Levels What are they? When do you use them?
Best Practices 47

48. 4. Evaluating the Cost
COST IS ALWAYS AN ISSUE. 48

49. Different Ways of Handling Cost
Best solution (within budget)
Cost is just another evaluation factor
‘Bang’ for the buck
Two steps: first, merit; then cost 49

50. Best Solution (Within Budget)
1. Score the proposals on technical and management evaluation factors combined.
2. Select the proposal with the highest score, regardless of price or within budget. 50

51. Cost Is Just Another Evaluation Factor
Arguments against this approach
Assigning weights
Determining the score 51

52. Ratio of Costs Proposal Cost Calculation of Points Points A $300,000
(250,000/300,000) x 100 83 B
$250,000
(250,000/250,000) x 100
100 C
$275,000
(250,000/275,000) x 100 91 52

53. ‘Bang’ for the Buck Concept of value
Determine the score for management and technical factors
Divide by dollars: points per dollar 53

54. Two Steps: First, Merit; Then Cost
Determine management and technical scores. Eliminate all those that fail to get some minimum established by evaluators.
Proponent
Technical &
Management Score
Company A 86
Company B 75
Company C 70
Company D 82
Company E 65 54

55. For those remaining, look at the cost and select the minimum.
Proponent
Technical &
Management Score
Cost
Company A 86
$250,000
Company B 75
$225,000
Company C 70
xxx
Company D 82
$200,000
Company E 65 55

56. 5. Developing a Short List
Consider these scores: 82 80 78 72 65 63 50 48 56

57. 6. Interviewing the Suppliers
Clarification meetings
Oral Presentations
Demonstrations 57

58. 7. Negotiating the Contract
Solid reasons for negotiating:
Increase the number of high-scoring proposals (providing greater competition).
Reduce risk to both parties.
Eliminate unnecessary costs.
Reduce costs.
Improve benefits (better quality, performance, delivery etc.).
Identify alternative solutions not initially apparent.
Clarify requirements and proposals.
Create better understanding and relationships between the parties.
Improve the contract.
Improve the proposal.
Identify/explore opportunities for partnership. 58

59. Negotiations Can Be Scary!
Many procurement people receive little if any training.
The supplier is better prepared.
Roles and responsibilities are poorly defined.
Many people find negotiations awkward. 59

60. The Negotiation Process
1. Preparation
2. Fact Finding
3. Bargaining 60

61. PRICE IS ALWAYS AN ISSUE!61

62. 8. Requesting Best and Final Offers
What is BAFO?
How does it work?
Montana’s rules 62

63. Montana’s Rules Best and Final Offers (Optional Step)
The committee may decide to seek best and final offers from one or more offerors if additional information is necessary or responses will be altered in order to make a final decision.
The committee may request only one best and final offer.
Offerors may not request an opportunity to submit a best and final offer. The procurement officer must be notified of the offerors who are provided the opportunity to submit best and final offers and the areas to be addressed. 63

64. Montana’s Rules Best and Final Offers (Cont’d.)
The procurement officer will send out the request for best and final offers in a letter stating the areas to be covered and the date and time in which the best and final offer must be returned.
Proposal scores are adjusted in light of the new information received in the best and final offer.
A best and final offer cannot be requested on price/cost alone unless so stated in the RFP. 64

65. 9. Using References/Past Performance
To confirm your selection
As an evaluation factor 65

66. Inside the Evaluation Process
The Building Blocks of The Evaluation Process
Establishing Compliance
Scoring the Proposals
Imposing Upset Levels
Evaluating the Cost
Developing a Short List
Interviewing Suppliers
Negotiating the Contract
Requesting Best and Final Offers
Using References/Past Performance 66

67. My Five Favorite Problems6.

68. Favorite Problem #1
The process is politicized.

69. Favorite Problem#2
Senior management/ politicians
want to be involved.

70. Favorite Problem #3
INFORMATION TECHNOLOGY!!!

71. Favorite Problem #4
Specifications are biased.

72. Favorite Problem #5
All proposals are over budget.

73. Critical Success Factors
A well constructed RFP
A tested evaluation process
An empowered Evaluation Committee
Documentation and probity
A knowledgeable, experienced, ethical procurement officer

74. Conclusions 7.
What have we learned???

75. Thank you.
Michael Asner
604/ 75