Make A Winning Bid

When distributors think Request for Proposals (RFPs), no doubt the education market sector comes to mind. RFPs are a common requisitioning tool used by schools and similar institutions to notify vendors that they are seeking competitive bids on specific products, equipment or services. Distributors who plan on servicing or growing their reach in the education market must have a strong understanding of the ins and outs of RFPs.

While many distributors are seasoned at meeting RFP specifications, others can be put off by the sometimes intimidating list of requirements. This article will attempt to debunk some of the misconceptions — and confusion — surrounding the proper response to an RFP.

These requests contain detailed specifications, known as specs, that outline exactly what prospects want to purchase, and how they want to purchase it. RFPs are widely used by city, county, state and federal agencies, including public school districts, colleges and universities.

The good news is that such notices are generally public information, so if a distributor pays attention — or gets on the bidder’s list — that distributor will get a notice and a specific amount of time to prepare and submit a response to the RFP. The bad news is that the competition might get the same notice, and the lowest “qualified” response typically gets the business.

Responding to the RFP
RFP’s are often very specific, so distributors should read the fine print carefully. Specs are usually quite detailed, and specific steps must be followed to ensure the submission of a “qualifying response.” Bottom line: if the instructions aren’t followed exactly, the bid will be disqualified. Some examples of these requirements might include: attending a pre-bid conference, submitting questions by a certain date, providing references, submitting multiple copies, using provided forms and labels, and enclosing specific documentation such as insurance certificates, business and corporate licenses, MSDS data and test results.

When it comes to dealing with large state and federal bids, there are consultants and other companies that, for a fee or a percentage of the winning bid, will assist you in preparing and submitting a qualifying response. This doesn’t guarantee a winning bid, but it does help protect against disqualification due to confusion about what the RFP requires.

These consultants monitor the newspapers of public record and the Federal Register to obtain information on RFPs and bid requests released by public agencies. For information on such services, do an Internet search using the words “government bids” or “government bidding services.” One free subscription service for federal agency RFPs can be found here.

You can also monitor your local newspaper of record. Normally you will find RFP and bid notices published in the classified section of the newspaper under the “Public Notices” heading.

A Timely Response Is Required
Get responses in on time or early. Bidders should have responses in at least one or two hours before the deadline. All RFPs will specify that the bid response be delivered in a certain format, to a certain location, and by a specific date and time.

One distributor recently lost a multi-million dollar annual contract because its RFP response was delivered five minutes late. Excuses such as “caught in traffic” or “salesperson neglect” don’t make a difference. The bid went to the competition and the salesman, who had been with the company more than 20 years and reportedly earned over $100,000 per year, is now unemployed.

Writing the Specification
To help the customer reach its goals, it is not uncommon for a manufacturer or distributor to assist the customer in writing the specification for the products detailed in the RFP. The goal is to help the customer write such tight specifications that it is difficult or impossible for a competing distributor to meet the requirements of the RFP. In many cases, detailed specs will discourage competitors from taking the time to prepare a qualifying response to an RFP, and if one distributor is the sole responder, it’s an easy choice for the buyer.

According to Joe Putyrae, sales manager for Sales West Partners Inc., San Leandro, Calif., “It’s an old concept, but if your product is the only one that meets the specification, it becomes an easy — as well as logical — choice for the purchasing agent who often doesn’t know one product from another and is focused on or required to take the lowest bid.”

Helping a customer write specs requires that distributors have done a good enough job of selling the benefits of their specific product that the customer prefers to purchase that product over a competitor’s. There must be a close enough relationship with the customer that they trust that distributor and are willing to take the time to write a specification that will put that product in a favorable position.

In some cases, it might be possible to avoid the RFP process altogether by keeping the purchase under a predetermined threshold dollar amount. Many public agencies can make individual purchases of $3,000, $5,000 or even $10,000 or more without having to go though the purchasing department or putting the request out for public notice or competitive bid. One way to do this is to break the order up into several smaller purchases throughout the year or over a period of time. Purchases can be divided into separate calendar years, thus staying under the dollar amount limit for each year.

Value-Added RFPs
One of the challenges facing facility managers in the public sector is getting the purchasing department to recognize “value-added services and life-cycle cost savings” over “lowest price” as the biggest decision-making factor.

Facility managers at Colorado State University (CSU) in Fort Collins have devised a multi-tiered RFP process that enhances the typical state bidding. This type of RFP system enables managers to request bids that take value-added services such as training and technical support into account.

The first thing facility managers do is examine a number of variables to evaluate the bid. Naturally, unit cost is a major consideration (weighted as roughly 30 percent of the decision), but this is weighed against such things as training and service costs, along with the effectiveness of the product. Second-level criteria scrutinize more specific aspects of the bidder’s proposal. This includes: the distributor’s ability to meet delivery and billing deadlines, financial stability, the product’s expected life, service and repair cycle, as well as quality and production rates.

Bruce Stark, building service manager, and Jeff Woodridge, housekeeping supervisor at CSU, work together to develop their RFP specifications. “An effective RFP must be data-driven and requires knowing exactly what you want,” says Woodridge. “Determining those needs can be a time-consuming process.”

According to Stark: “End users want objective information about systems and services that address their needs, not just product selection and pricing. Such data helps persuade the university purchasing staff to consider value-added rather than a price-driven program.”

Purchasing officials at CSU report that its building services department saved the school at least $35,000 the first year after it implemented the use of these comprehensive RFPs. Stark says the per-year savings since then has been $25,000. “We’re making better judgments based on value, while improving the quality of the services we provide.”

The Trick Is Training
Finding and keeping qualified help is an age-old challenge for the cleaning industry. For this reason, many end users now specify in their RFPs that distributors and manufacturers provide employee training as part of their purchase agreements.

Examples of such specifications include:

• Supplier will provide cleaning staff with monthly training on products and equipment
  
• Training will be provided by certified instructors
  
• Monthly supervisory and management training will be offered
  
• Hands-on as well as classroom training will be conducted
  
• Written and video training materials shall be customized and available in English and Spanish
  
• Cleaners shall be tested and certified by the training provider as having met specific levels of competency
  
• Nationally recognized independent certification programs shall be offered at least annually in the local area
  

The Education Market
Educational facilities have needs local distributors can address by packaging products in a framework to meet those needs.

“The key is not selling products alone, but rather promoting processes that enable customers to reallocate the limited dollars they have, for better use,” says Putyrae.

“Nobody ever has enough money,” he adds. “These days you have to educate and show the customer how what you’re selling will save them money by reducing their labor costs. And telling them isn’t enough; you have to get involved in the operation and make the product and process work right in front of their eyes, in their organization, with their people.”

Don’t ‘Donate’ Training
Typically, distributors give away training just to get more business. This trend must be reversed as the value of training becomes more apparent.

“Some end-users and their purchasing departments tend to underestimate the cost of internal training (performed by their own staff),” says consultant Ralph Rice, with Housekeeping Systems, Inc. (HSI), St. Louis. After sending out an RFP asking for such value-added services as training and usage reports and receiving well-thought-out responses, they may be shocked at the total price tag.

“When faced with sticker shock, some purchasing departments have a tendency to revert to simply looking at product cost. There must be a commitment to accurately evaluate the value-added portions of an RFP response,” says Rice.

“The danger here is that the distributors, who have spent a great deal of time and money preparing a sophisticated response, will quickly become turned off to these types of RFPs if the purchasing people revert to looking at product price only.”

According to consultant Ron Cohn, Ralston Consulting Group, Salt Lake City, this begs the question of how to “professionalize the customer,” or show the value of training workers in systematic, better and healthier cleaning methods, while charging a fair price for such in-depth training.