RFP: Request for Pain

Having done two mandatory tours of duty in the big agency world, I understand the RFP process. It’s a necessary evil to win most large accounts. However as a small business, I find them to be downright painful. An RFP ought to be called a Request for Pain.

As a small business owner, RFPs are extremely taxing. Consider that in a large or mid-size agency you have business development and senior staff dedicated to winning this kind of business. In a small agency like mine, you are basically pulling time from a very limited resource pool. Instead of focusing on local networking events, phone calls, building relationships online, and developing useful content, you spend 20, 40, 60 or more hours building a proposal and pitch.

The odds of winning RFPs are not good when you are small. I would say the same thing for a large agency, but is easier to dedicate the resources and mitigate the risk.

You almost always have to have a prior relationship, and get the RFP written to you, or intelligence to help you shape your pitch. There is almost always a favorite or two in the dance.

If you do not have a prior relationship, question whether it is worth your time. Many times the third through fifth firms have been referred as good agencies that might be able to do the job, but the odds are long. In the cases were the RFP is hard-wired, some or all of players three through five are asked because they can’t win. They have a glaring flaw.

In the case of a small agency, size is almost always in issue. In a wired RFP, a small agency is an easy kill. Scaling questions must be addressed to the client’s satisfaction. Sometimes this is overcome with a focus on niches, such as community management or social media content. With larger contracts, though, even the ability to scale quality niche work becomes an issue. Most large companies don’t want to deal with a network of consultants and small boutiques to achieve scale. Can you blame them?

People do business with people they like. So if there is no relationship, you have to become the darling of the potential client very quickly and get the same type of intelligence that the favorites receive. That can be hard to do. If the client is cold and distant during the initial RFP process consider it a clear warning that you are wasting your time.

I almost always decline to participate in RFPs because of these many issues. The pain is not worth it. At least for a small firm like mine. My time is better served networking and building relationships for projects and winning business with people that know and trust me (and my firm).

What do you think of RFPs?

  • Peter Campbell

    So, as the self-appointed defenders of RFPs in the non-profit community, I read a post like this and agree with most of it. But I still argue that any company, no matter how small, should have a formal RFP or RFI process when purchasing goods or services that that require a significant expenditure or offer a high risk/benefit to their work.

    I don’t think that the problem is the RFPs — I think it’s the lack of education among small businesses and nonprofits about how to do them. I’ve blogged about this quite a bit at techcafeteria.com, but I’d say two things here: right-sizing is essential. If I work for a small nonprofit, I don’t want to hire the big vendors and agencies. I don’t want to be the smallest customer, particularly for a vendor that charges by the hour. They are not going to prioritize my work, and they’ll probably not be very interested in it. Ideally, I’m at about the 70-80th percentile in terms of client size for that vendor. It also helps if they’re mission-focused. By the same token, RFPs have to be right-sized, as well. You can’t give a small agency an 80 page RFP for a $10-20k project — there is no reason why that vendor should participate.

    The point of the RFP is to clearly state your needs, assess the vendor’s suitability to address those needs, and to offer a level-playing field to the vendors. You can’t just copy someone else’s webdev RFP and think that it will do, and, if you don’t know exactly what your website will look like after the project (and you probably shouldn’t know, at this stage), you should not be asking for a fixed bid.

    At my org, we don’t play favorites — we narrow to the best responses, interview (ideally, the people that we’ll be working directly with), and hire the best match. We do a lot of RFIs and RFPs, but they aren’t annoying RFPs, and the one for the $100k+ project has a lot more pages than the one for the $15k project (which is usually just a one to two page RFI).

    • geofflivingston

      I could see that, but I think if most small businesses and nonprofits knew more about RFPs, specifically submitting for them, they would simply opt out. As ethical as many RFP processes are, invariably the winner had a prior relationship somewhere on the decision team. I bet if you did an honest audit of your past 10 RFPs, a majority of them were awarded to vendors with prior existing relationships.

      I don’t care how level the playing field is. People do business with people they like. And consider that not every government agency, company or foundation plays it as clean as yours does.

      • That’s a really good point, Geoff (in fact the whole post is). I’ve seen plenty of RPFs that were so obviously written for one company (or person) in particular that it might as well have said “The CEO must be named ‘Bruce’ and he has to be a fan of Pink Floyd. ‘The Wall,’ mind you, not ‘Dark Side of the Moon’.”

        I’ve even heard allegations (second-hand) of RFP scoring totals being changed after the interviews to accommodate the ‘correct agency.’

        However useful RFPs might have been when they were originally thought up, nowadays the vast majority don’t provide much more than a thin veneer of fairness to an already rigged game. And the agency bosses that I’ve spoken with about RFPs in the past just wish that government organizations/etc. would have the balls to just tell everyone “this is who we’ve picked” and stop wasting their time.

  • Bob Reed

    It’s a sweepstakes. It’s a process with outcomes that are illogical as they are frustrating.

    • geofflivingston

      Agreed. It’s a process that is more subject to internal politics than anything a qualified vendor could imagine.

  • Funny–I wrote on this exact topic about a year ago, saying I was not completing any more RFPs. Not a single one. Raise some ire. But, also got a lot of support. I’m with you, Geoff.

    • Peter Campbell

      So, that’s fine, if you have a very established clientele who are never going to stop hiring you, or you only do small projects. Our procurement policy requires an RFP process for consulting/dev work estimated to be over $20k. Who knows how many potential clients you’re turning away? Nobody is making up the stories about nonprofits that do RFPs with a vendor pre-selected. But that doesn’t happen all of the time, or even most of it. In many cases, clients (like me) really don’t know who is going to be the best vendor, so we do RFPs to get key questions answered and hire the best match. And a good policy (like ours) includes a diverse review team (cross-departmental) and a requirement to recuse oneself if they have friends at a participating firm. My CEO stepped out of a critical vendor selection process last year when he realized that the consultant was on the board of his wife’s NPO. He wouldn’t let me discuss it with him until the decision had been made. I had no clue who he preferred.

    • geofflivingston

      There are so many ways to win business, and this is not the easiest one for sure.

  • I founded RFP Associates to avoid all you’ve described, Geoff. Our goal is to create a level playing field for all clients seeking agencies. In our world the RFP must be detailed (budget, timeline, clear SOW, no spec work) and the process must be transparent and fair to all agencies involved. Having been on both the agency and client sides my partner and I know the pain points and work to ensure the best agency selection. We even provide feedback to the agencies that were not chosen – http://www.rfpassociates.net.

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