The Proposal is Due and...

Moderator
David Coulter
Vice President, Sales Development
Atlas Van Lines, Inc.

Presenter
Jay Allen
Director, Indirect Materials
Asurion Corporation

Moderator David Coulter set the stage for the workshop by citing findings of the Worldwide ERC that underscore the growing importance of proposals. He introduced Jay Allen, Asurion Corporation, who shared his experience as a procurement entity in the proposal process.

Jay asserted that companies are looking to procurement for help in cutting costs and saving money. The procurement function does not have a budget, so it does not "foot the bill" for the proposal process. The role of procurement is to provide due diligence to make sure the process is followed, that every bid is evaluated, and that participating companies are qualified. A good RFP process will include, at the least, the business owner and someone from procurement. Even if a procurement department doesn't have the final say in a decision, it "carries a really big stick" in the process.

When answering an RFP, Jay said the proposal must be complete. He cited a company whose proposal was "kicked out" because it had ignored the question about supplier diversity. (The company was too small to have such a function.) Jay said it is better to explain why a question does not apply than to leave it blank, and to try to turn your response into a selling point if possible.

Some sections of the proposal are weighed more heavily, but submitters do not know which. If something in the RFP is unclear, one should ask their point of contact for clarification. Sometimes the difference between applicants can be minuscule, so it behooves you to give serious thought to every response. If there are 75 questions, answer every one. The finer points can be the tiebreaker.

Companies have varying degrees of flexibility in their RFP processes. For example, online RFPs do not allow you to hit the submit button until all fields are completed. If one is invited to participate in the RFP process, it is fair to ask whether there will be time to submit questions. Often, the process will provide for posting such questions with answers for all to see. To keep a level playing field for bidders, once the window closes on that part of the process, it's too late to take advantage of it. Administrators work to ensure there is no bias, so submitters feel they received a fair shake.

Although a submitter should stick to the format provided, it does not preclude one from submitting a second or third proposal. This is a chance to be creative and give the buyer other options. You can remain in the running by completing the RFP as presented, and give yourself an edge by bringing out selling points not covered in the RFP. "I've found on occasion that the suppliers knew more about what was needed than the RFP indicated."

When the buying party reads the proposal, it first checks to make sure the document is complete. Scores reflect the grades according to the weights that were assigned when the RFP was designed. The next step is to decide which submitters to invite for a live presentation. Every step is part of an elimination process, trying to cull the field from five or ten down to one.

The presentation is an opportunity to bring things to the table that the RFP didn't cover. Once the first choice candidate is determined, the final conversation usually comes down to pricing, i.e., "Now let's see if we can come together on something we want to pay for." Usually, this is the point at which a contract discussion begins.

Jay lives by a bird-in-hand philosophy when finalizing contracts; he does not notify other RFP finalists of his decision until he has a deal. And he believes in leveling with the also-rans. "I tell my team, don't just eliminate someone without letting them know what happened."

Typically, contracts extend from one to three years. The length of contract can be strategic. Longer terms, for example, can lock in favorable pricing during times of likely increases. Shorter terms may be used until a new relationship has had time to prove itself. Jay said he does not like to revisit contracts any more frequently than necessary. And throughout the RFP process, he tries to remain objective and fair. "I try to go about my business with the understanding that the people on the other side of the table are in business as well."