6 ms·

RFPs Will Kill Us All

42 points by maxcameron 17y ago

billymeltdown 17y ago
Nice article, Max. Carl from nGen Works has an interesting post up of late on the same topic: http://www.ngenworks.com/blog/detail/from_the_archives_chapter_1_answering_rfps http://www.ngenworks.com/blog/detail/from_the_archives_chapt...
tptacek 17y ago
3/4 through this article I started wondering whether this was some kind of Swift-ian satire about the graphic design "spec work" argument. I don't think it is. Here's the deal: it's called supply and demand. If clients have 10 quality firms to choose from, and they pay their firms enough, then building an excellent RFP is simply going to be the cost of doing business with them. Sometimes, some firms are so good, and provide output that is so hard to match with any substitutable firm, that they get to set the terms for the client/vendor relationship. Those firms know who they are, because they have waitlists, and are already turning down clients. If you want to boycott RFPs, by all means, get your lunch eaten by the companies who are willing to throw those two extra non-billable days at the task of making themselves extra easy to work with. But I don't think you're going to manage to demonize the RFP process the way designers have the spec-work process, because RFPs are simply the way consulting works.
- drewcrawford 17y ago
  > because RFPs are simply the way consulting works. Not all the time. I never respond to public RFPs, and neither does the OP. Apparently in our (separate) niches, you can get by just fine. Agree with your point about supply and demand, but good hackers are (nearly) always in demand, and so can nearly always find work. It's the strange outsourced companies that spend all their time searching for work that end up responding to RFPs, and that's dangerous even to clients. Look at it this way: if you have a pool of proposals sitting on your desk, 90% of which are from firms that are simply incapable of doing the job[1], and you are a business/nontechnical chap, it's going to be difficult to find the 10% who are capable, let alone competent. Meanwhile, technical guys who are good hackers but don't understand this see lots of firms sending out and responding to RFPs and think this is how it works, so I guess we have to do it too. [1] http://www.elance.com/php/search/main/eolsearch.php?matchType=profile#page=1&matchKeywords=iphone%20developer&sortBy=&sortOrder=1&bizFilter=false&catFilter=10183&indFilter=false&premierFilter=false&feedbackFilter=0&reviewsFilter=0&minrateFilter=lt20&locFilter=&regionFilter=&zipFilter=&zipRadiusFilter=50&skillFilter=-100&groupFilter= http://www.elance.com/php/search/main/eolsearch.php?matchTyp...
  - tptacek 17y ago
    Knowing what I know about the bill rates for the kind of work we do versus the kind of work you likely do, I'm going to humbly suggest that we're in more demand than you are (not a value judgement, just an observation about scarcity). We absolutely do respond to RFPs, when they're for projects we want to work on or clients we really want a relationship with. And we always spend serious otherwise-billable time on proposals, even though that's the same speculative work that this article argues against. It's important to us to be easy to work with, because we want good projects. We don't want to confine ourselves to whatever lands in the margins of "unusually liberal clients"; those clients don't necessarily have the best projects. I read the other post referenced on this thread, and so I'll add that being able to smoke out the bogus RFPs you shouldn't waste time responding to (because they indicate inept purchasers, or, for instance, because they probably mean the client is in the tank for another vendor) is just one of those things you need to be able to do to succeed as a consultant.
    - ajju 17y ago
      Any pointers on how to identify clients already in tank with another vendor? Being overly specific in the RFP and demanding the exact features a vendor has is a clear giveaway but I am wondering if there are any other signs. I am new to this RFP business.
      - tptacek 17y ago
        We get on the phone before we respond to expensive RFPs, and there are questions you can ask (incumbent vendors, past experience with vendors, is there a formal requirement for the RFP, or do they genuinely want real proposals, etc). On "real" RFPs, especially if you have a good shot, you'll find the purchaser you talk to is accomodating; they'll set aside time for calls to answer questions, and they'll do a good job with your Q&A submission (as a general rule, real RFPs have Q&A phases, though note that you never know whether your Q's are going to other vendors too). There is an old negotiating trick a bizdev guy taught me once, which is, if you want to figure out whether a deal is real or whether the other side is just wanking, figure out a reason to schedule a meeting on a Saturday. If the deal is big and the other side is serious, they'll do it. Similar idea here, although less aggressive. If your firm's way of handling the RFP process is to simply pick up the forms off some website, mail them in, and hope, then yes, I can see how the RFP process would upset you.
madmotive 17y ago
Our approach is to respond to RFPs with a fixed-rate proposal development fee. Anyone that's good enough to be in demand should do the same. Clients that expect you to do work for free will probably turn out to be difficult people to work with in the long term.
- tptacek 17y ago
  Do people tend to actually pay you to develop proposals? Or is that just your way of turning down RFPs? I make this same observation every time the spec-work argument comes up (if you haven't picked up on it, I'm also not against spec-work): When we were just getting started, lawyers from WSGR and another firm spent literally hours on the phone with us, for zero money and no promise of ever being compensated, presumably because the fact that they're willing to be that cool to work with costs them very little and makes them incredibly attractive in the long run. I want to be like them.
  - madmotive 17y ago
    Good point. So far about half have paid. I guess the main reason this works for us is that we prefer smaller projects. We don't aspire to being a huge consulting company / agency taking on bigger and bigger projects. We like working on small projects that grow into bigger things.
    - tptacek 17y ago
      Just be aware that you're not only restricting the size of the projects you take on, but also the selection of clients you have to work with. Some very excellent projects will require competitive proposals for you to get in the door.
9oliYQjP 17y ago
Most consultancy firms that don't respond to RFPs eventually die. Of those firms that survive, they could be viewed as a collective of successful freelancers. There typically is not enough revenue to grow the company beyond the founding consultants because the project budgets that they deal with are typically $15K to $50K. You can definitely get away with not responding to RFPs if you're only ever dealing with budgets of tens of thousands of dollars. Also, an RFP is a way for customers to weed out the "I just quit my day job at an agency and started my own consulting company" firms. These customers want to deal with bigger firms because they expect these companies to be around for a while and provide support years down the road. A bigger company can afford to devote a few employees for a couple of weeks to address an RFP properly.
- tptacek 17y ago
  I thought we put a lot of effort into RFPs, but wow, 2 employees 2 weeks is crazy. For us, it's more like 1-2 days.
  - 9oliYQjP 17y ago
    Depends on the project. A lot of website RFPs can be done in a crunch session of 1 to 2 days. I've had to bid on systems that interacted with assembly lines and ones that involved dealing with the government and getting security clearances. These latter two took 2 calendar weeks although the people involved in putting together the RFP were definitely not working full time on it until the last minute. All in all you might have 1-2 days of actual work, 1-2 days spent Q&A attending meetings with the client and other potential vendors, etc. The time can add up. I have seen one ridiculous "RFP" that a government agency up here put out recently in which they wanted potential vendors to essentially do 6-8 months worth of work and if they landed the project, they'd end up with a long term multi-year contract. We're talking tens of millions of dollars here, but still, that one struck me as quite the lottery and I'm pretty sure the only companies that responded to it were the big names consultancy firms. EDIT: here's the results of that RFP...whaddaya know look which firms won the bid: http://www.newswire.ca/en/releases/archive/October2009/21/c8969.html http://www.newswire.ca/en/releases/archive/October2009/21/c8...
easyfrag 17y ago
I work for a publicly funded institution, in our jurisdiction we have to go through the RFP process. It is either an RFP (where we are allowed to do an evaluation of who "best" met the requirements - using a pre-defined scoring criteria) or a straight tender where we have to pick the lowest bid that meets the requirements. I sympathize that it is very difficult to produce a proper response to an RFP, however as one who evaluates those responses let me tell you it is quickly evident which vendors spend the time to do so. It is also painful on the client side to prepare the criteria on which to fairly evaluate the responses. It is an imperfect process and definitely more of an art than a science but the good news is that a well-defined RFP will often signal a client who understands their requirements.
zachware 17y ago
The article is well thought out and presents a good viewpoint. I think it's one-sided and, um, short-sighted. I see the RFP process from the viewpoint of a buyer and a provider. From the buyer's standpoint, when we start a project we simply don't know what firms are capable of doing what we want done. The RFP gives us a level playing field to compare costs, capabilities, and experience. Without an RFP, particularly for complex projects, you can spend months scoping out capbilities, refining your needs (both of which you should be doing AFTER you form a relationship.) Which takes longer for a firm? Researching an RFP and presenting a document for a potential client's review or spending eight months going back and forth trying to figure out what to build. Of course, the latter. The difference is that providers get paid for those eight months (a plus for them) while buyers get nowhere.
rdl 17y ago
The normal way to solve this in government and big dumb companies (which issue RFPs) is to have one domain-specific expert firm awarded an RFP management contract, recusing itself from the actual implementation contract, which then specifies what will be in the RFP. Judging the proposals is a combination of the client and process-management contractor, and in some, the management contract manages the ongoing relationship with the contractor as well. It's inefficient for best case (you have 2 contracts instead of one), but solves a lot of worst-case problems (bribery or incompetence leading to a rigged bidding process, companies awarding themselves contracts, or buying a perfect but wrong thing). I'm not sure of the background of the author, but RFPs are standard in a lot of domains.
MichaelTroy 17y ago
For the most part, I view the RFP as a way to encourage wrong and ill-fitting service providers or third party consultants to engage with your company or business. Simply put, an RFP is just a tick-a-box approach to seeking skills and services externally. The tick-a-box approach and mentality by it's nature sets up a very black and white context. This is the problem. Business for the most part is not purely objective. A better approach I think, would to be more proactive and approach only those service providers or companies that are somewhat aligned with your business or company values and vision. Another solution (for bigger companies) would be to fund smaller independent teams to consult as an acting external supplier.
HistoryInAction 17y ago
Hmm, this perspective seems to ignore growing services like InnoCentive and Aardvark to connect people with knowledge to buyers. I'm not sure about the pricing equilibriums in play, and I'm not sure about the relevance to RFPs. Am I relating two frameworks that shouldn't be?
lsc 17y ago
hm. well, personally, I find 'relationships' in business usually raise costs. How to get around this? I don't know. You could simply only buy commodities. If this is possible, it is clearly the best answer. However consulting isn't a commodity, and neither is design work. it seems that making it a commodity is a 'hard problem' - RFPs are one attempt to treat consulting as a commodity, and they are obviously imperfect.
kristianp 17y ago
In case anyone's wondering, RFP (probably) stands for Request for Proposal http://en.wikipedia.org/wiki/Request_for_proposal http://en.wikipedia.org/wiki/Request_for_proposal
- tptacek 17y ago
  FWIW: An RFP is just a company's formal process for documenting an upcoming project and soliciting proposals from multiple vendors for it. There are as many RFP processes as there are companies running RFPs.
bengtan 17y ago
Mike Bosworth's two books Solution Selling and CustomerCentric Selling talk a bit about RFP/RFQ's. The authors note that most RF[PQ]'s are prewired and biased towards a preferred vendor. The client gives out the RF[PQ] so the client can say it was properly competed for so it can pass the approval process in upper management. If you are not that preferred vendor who was there from day one, you will most likely not win. The author cites one anecdote of a big company that has a separate department that only handles RF[PQ]s. One day they decided to take some metrics over a time period. Out of that time period, they submitted 153 bids to unsolicited RF[PQ]s ... only won 3.
- tptacek 17y ago
  Some RFPs are definitely rigged. Spotting them is part of being a good consultant. See upthread for a deeper discussion on this. "Most" RFPs are not rigged. A company that submits 153 RFP responses and wins only 3 has a problem, and it isn't with the concept of RFPs. Perhaps their pricing is wildly out of whack. For awhile, there were things we did wrong with our proposals that cost us several RFPs. We figured them out, resolved them, and systematically improved our win rate. There is no way that 1.9% (or even 5%) of RFPs are bogus.
- billymeltdown 17y ago
  > "The client gives out the RF[PQ] so the client can say it was properly competed for so it can pass the approval process in upper management." Indeed, we call this "column fodder," ;-)

42 points by maxcameron 17y ago

Nice article, Max. Carl from nGen Works has an interesting post up of late on the same topic: http://www.ngenworks.com/blog/detail/from_the_archives_chapter_1_answering_rfps http://www.ngenworks.com/blog/detail/from_the_archives_chapt...

tptacek 17y ago

3/4 through this article I started wondering whether this was some kind of Swift-ian satire about the graphic design "spec work" argument. I don't think it is. Here's the deal: it's called supply and demand. If clients have 10 quality firms to choose from, and they pay their firms enough, then building an excellent RFP is simply going to be the cost of doing business with them. Sometimes, some firms are so good, and provide output that is so hard to match with any substitutable firm, that they get to set the terms for the client/vendor relationship. Those firms know who they are, because they have waitlists, and are already turning down clients. If you want to boycott RFPs, by all means, get your lunch eaten by the companies who are willing to throw those two extra non-billable days at the task of making themselves extra easy to work with. But I don't think you're going to manage to demonize the RFP process the way designers have the spec-work process, because RFPs are simply the way consulting works.

drewcrawford 17y ago
> because RFPs are simply the way consulting works. Not all the time. I never respond to public RFPs, and neither does the OP. Apparently in our (separate) niches, you can get by just fine. Agree with your point about supply and demand, but good hackers are (nearly) always in demand, and so can nearly always find work. It's the strange outsourced companies that spend all their time searching for work that end up responding to RFPs, and that's dangerous even to clients. Look at it this way: if you have a pool of proposals sitting on your desk, 90% of which are from firms that are simply incapable of doing the job[1], and you are a business/nontechnical chap, it's going to be difficult to find the 10% who are capable, let alone competent. Meanwhile, technical guys who are good hackers but don't understand this see lots of firms sending out and responding to RFPs and think this is how it works, so I guess we have to do it too. [1] http://www.elance.com/php/search/main/eolsearch.php?matchType=profile#page=1&matchKeywords=iphone%20developer&sortBy=&sortOrder=1&bizFilter=false&catFilter=10183&indFilter=false&premierFilter=false&feedbackFilter=0&reviewsFilter=0&minrateFilter=lt20&locFilter=&regionFilter=&zipFilter=&zipRadiusFilter=50&skillFilter=-100&groupFilter= http://www.elance.com/php/search/main/eolsearch.php?matchTyp...
- tptacek 17y ago
  Knowing what I know about the bill rates for the kind of work we do versus the kind of work you likely do, I'm going to humbly suggest that we're in more demand than you are (not a value judgement, just an observation about scarcity). We absolutely do respond to RFPs, when they're for projects we want to work on or clients we really want a relationship with. And we always spend serious otherwise-billable time on proposals, even though that's the same speculative work that this article argues against. It's important to us to be easy to work with, because we want good projects. We don't want to confine ourselves to whatever lands in the margins of "unusually liberal clients"; those clients don't necessarily have the best projects. I read the other post referenced on this thread, and so I'll add that being able to smoke out the bogus RFPs you shouldn't waste time responding to (because they indicate inept purchasers, or, for instance, because they probably mean the client is in the tank for another vendor) is just one of those things you need to be able to do to succeed as a consultant.
  - ajju 17y ago
    Any pointers on how to identify clients already in tank with another vendor? Being overly specific in the RFP and demanding the exact features a vendor has is a clear giveaway but I am wondering if there are any other signs. I am new to this RFP business.
    - tptacek 17y ago
      We get on the phone before we respond to expensive RFPs, and there are questions you can ask (incumbent vendors, past experience with vendors, is there a formal requirement for the RFP, or do they genuinely want real proposals, etc). On "real" RFPs, especially if you have a good shot, you'll find the purchaser you talk to is accomodating; they'll set aside time for calls to answer questions, and they'll do a good job with your Q&A submission (as a general rule, real RFPs have Q&A phases, though note that you never know whether your Q's are going to other vendors too). There is an old negotiating trick a bizdev guy taught me once, which is, if you want to figure out whether a deal is real or whether the other side is just wanking, figure out a reason to schedule a meeting on a Saturday. If the deal is big and the other side is serious, they'll do it. Similar idea here, although less aggressive. If your firm's way of handling the RFP process is to simply pick up the forms off some website, mail them in, and hope, then yes, I can see how the RFP process would upset you.

madmotive 17y ago

Our approach is to respond to RFPs with a fixed-rate proposal development fee. Anyone that's good enough to be in demand should do the same. Clients that expect you to do work for free will probably turn out to be difficult people to work with in the long term.

tptacek 17y ago
Do people tend to actually pay you to develop proposals? Or is that just your way of turning down RFPs? I make this same observation every time the spec-work argument comes up (if you haven't picked up on it, I'm also not against spec-work): When we were just getting started, lawyers from WSGR and another firm spent literally hours on the phone with us, for zero money and no promise of ever being compensated, presumably because the fact that they're willing to be that cool to work with costs them very little and makes them incredibly attractive in the long run. I want to be like them.
- madmotive 17y ago
  Good point. So far about half have paid. I guess the main reason this works for us is that we prefer smaller projects. We don't aspire to being a huge consulting company / agency taking on bigger and bigger projects. We like working on small projects that grow into bigger things.
  - tptacek 17y ago
    Just be aware that you're not only restricting the size of the projects you take on, but also the selection of clients you have to work with. Some very excellent projects will require competitive proposals for you to get in the door.

9oliYQjP 17y ago

Most consultancy firms that don't respond to RFPs eventually die. Of those firms that survive, they could be viewed as a collective of successful freelancers. There typically is not enough revenue to grow the company beyond the founding consultants because the project budgets that they deal with are typically $15K to $50K. You can definitely get away with not responding to RFPs if you're only ever dealing with budgets of tens of thousands of dollars. Also, an RFP is a way for customers to weed out the "I just quit my day job at an agency and started my own consulting company" firms. These customers want to deal with bigger firms because they expect these companies to be around for a while and provide support years down the road. A bigger company can afford to devote a few employees for a couple of weeks to address an RFP properly.

tptacek 17y ago
I thought we put a lot of effort into RFPs, but wow, 2 employees 2 weeks is crazy. For us, it's more like 1-2 days.
- 9oliYQjP 17y ago
  Depends on the project. A lot of website RFPs can be done in a crunch session of 1 to 2 days. I've had to bid on systems that interacted with assembly lines and ones that involved dealing with the government and getting security clearances. These latter two took 2 calendar weeks although the people involved in putting together the RFP were definitely not working full time on it until the last minute. All in all you might have 1-2 days of actual work, 1-2 days spent Q&A attending meetings with the client and other potential vendors, etc. The time can add up. I have seen one ridiculous "RFP" that a government agency up here put out recently in which they wanted potential vendors to essentially do 6-8 months worth of work and if they landed the project, they'd end up with a long term multi-year contract. We're talking tens of millions of dollars here, but still, that one struck me as quite the lottery and I'm pretty sure the only companies that responded to it were the big names consultancy firms. EDIT: here's the results of that RFP...whaddaya know look which firms won the bid: http://www.newswire.ca/en/releases/archive/October2009/21/c8969.html http://www.newswire.ca/en/releases/archive/October2009/21/c8...

easyfrag 17y ago

I work for a publicly funded institution, in our jurisdiction we have to go through the RFP process. It is either an RFP (where we are allowed to do an evaluation of who "best" met the requirements - using a pre-defined scoring criteria) or a straight tender where we have to pick the lowest bid that meets the requirements. I sympathize that it is very difficult to produce a proper response to an RFP, however as one who evaluates those responses let me tell you it is quickly evident which vendors spend the time to do so. It is also painful on the client side to prepare the criteria on which to fairly evaluate the responses. It is an imperfect process and definitely more of an art than a science but the good news is that a well-defined RFP will often signal a client who understands their requirements.

zachware 17y ago

The article is well thought out and presents a good viewpoint. I think it's one-sided and, um, short-sighted. I see the RFP process from the viewpoint of a buyer and a provider. From the buyer's standpoint, when we start a project we simply don't know what firms are capable of doing what we want done. The RFP gives us a level playing field to compare costs, capabilities, and experience. Without an RFP, particularly for complex projects, you can spend months scoping out capbilities, refining your needs (both of which you should be doing AFTER you form a relationship.) Which takes longer for a firm? Researching an RFP and presenting a document for a potential client's review or spending eight months going back and forth trying to figure out what to build. Of course, the latter. The difference is that providers get paid for those eight months (a plus for them) while buyers get nowhere.

rdl 17y ago

The normal way to solve this in government and big dumb companies (which issue RFPs) is to have one domain-specific expert firm awarded an RFP management contract, recusing itself from the actual implementation contract, which then specifies what will be in the RFP. Judging the proposals is a combination of the client and process-management contractor, and in some, the management contract manages the ongoing relationship with the contractor as well. It's inefficient for best case (you have 2 contracts instead of one), but solves a lot of worst-case problems (bribery or incompetence leading to a rigged bidding process, companies awarding themselves contracts, or buying a perfect but wrong thing). I'm not sure of the background of the author, but RFPs are standard in a lot of domains.

MichaelTroy 17y ago

For the most part, I view the RFP as a way to encourage wrong and ill-fitting service providers or third party consultants to engage with your company or business. Simply put, an RFP is just a tick-a-box approach to seeking skills and services externally. The tick-a-box approach and mentality by it's nature sets up a very black and white context. This is the problem. Business for the most part is not purely objective. A better approach I think, would to be more proactive and approach only those service providers or companies that are somewhat aligned with your business or company values and vision. Another solution (for bigger companies) would be to fund smaller independent teams to consult as an acting external supplier.

HistoryInAction 17y ago

Hmm, this perspective seems to ignore growing services like InnoCentive and Aardvark to connect people with knowledge to buyers. I'm not sure about the pricing equilibriums in play, and I'm not sure about the relevance to RFPs. Am I relating two frameworks that shouldn't be?

lsc 17y ago

hm. well, personally, I find 'relationships' in business usually raise costs. How to get around this? I don't know. You could simply only buy commodities. If this is possible, it is clearly the best answer. However consulting isn't a commodity, and neither is design work. it seems that making it a commodity is a 'hard problem' - RFPs are one attempt to treat consulting as a commodity, and they are obviously imperfect.

kristianp 17y ago

In case anyone's wondering, RFP (probably) stands for Request for Proposal http://en.wikipedia.org/wiki/Request_for_proposal http://en.wikipedia.org/wiki/Request_for_proposal

tptacek 17y ago
FWIW: An RFP is just a company's formal process for documenting an upcoming project and soliciting proposals from multiple vendors for it. There are as many RFP processes as there are companies running RFPs.

bengtan 17y ago

Mike Bosworth's two books Solution Selling and CustomerCentric Selling talk a bit about RFP/RFQ's. The authors note that most RF[PQ]'s are prewired and biased towards a preferred vendor. The client gives out the RF[PQ] so the client can say it was properly competed for so it can pass the approval process in upper management. If you are not that preferred vendor who was there from day one, you will most likely not win. The author cites one anecdote of a big company that has a separate department that only handles RF[PQ]s. One day they decided to take some metrics over a time period. Out of that time period, they submitted 153 bids to unsolicited RF[PQ]s ... only won 3.

tptacek 17y ago
Some RFPs are definitely rigged. Spotting them is part of being a good consultant. See upthread for a deeper discussion on this. "Most" RFPs are not rigged. A company that submits 153 RFP responses and wins only 3 has a problem, and it isn't with the concept of RFPs. Perhaps their pricing is wildly out of whack. For awhile, there were things we did wrong with our proposals that cost us several RFPs. We figured them out, resolved them, and systematically improved our win rate. There is no way that 1.9% (or even 5%) of RFPs are bogus.
billymeltdown 17y ago
> "The client gives out the RF[PQ] so the client can say it was properly competed for so it can pass the approval process in upper management." Indeed, we call this "column fodder," ;-)