RFP Process - are they legally binding?

[Ev0]

I have also rejected RFP's from companies I feel are doing it wrong and in doing so got them to revise the whole process. Nothing better than saying "sorry, this is a terrible approach and I can't justify responding". Takes nuts but why consume a term of people on a war you never stand the chance of winning.

Not had to do this often but the few times I have it's usually ended up for the better, people shouldn't be afraid of doing this.

 

[El Pew]

Well I have been in the industry for over 30 years and I would say most RFP's come out of organisations who have a predisposed point of view on the technology they will likely buy, but not all of them. My advice from over 30 years in the game is ignore the ones you didn't expect.

Obviously this depends on the sector, but in my experience if the first you hear about an opportunity is the release of an RFP then you are doing it wrong. In the majority of cases I've been working on an opportunity before the RFP is released, that is I've done marketing work, initial meetings, demos, workshops and so on and so forth with the customer, sometimes for months. To an extent that allows me to set the agenda and plant some land mines for competitors as well to maximise my chances later. And as dowie said, qualification is the key - you need to fully understand the account, what the drivers are, who the major stakeholders are, budgets, loads of other things.

 

[NickK]

I'm just setting up my own consultancy practice, having spent the last 8 years as a senior consultant for a London based firm.

I've just been invited to respond to an RFP. This is the first time I've done this and I have a question:

Is an RFP legally binding in any way? E.g, should I accept the invitation am I at any risk or can I walk away?

Advice from those of you who have been there will be very welcome. In case it matters, and it probably does, the invitation has come from a company based in California.

For the UK, it's a request for a proposal - essentially you provide a proposal, if the proposal has a contract embedded and if they accept without changes and signed (and you've countersigned already which you should not do unless you're certain upfront) the contract it is binding. Not all proposals have a contract (and often people use the terms RFP and RFQ interchangeably).

RFQ is is a quote which is not binding. A contract is not binding until it's signed by both parties. You have the right to propose changes to any contract (except where it's law or against rights).

However the legals vary between countries and industry norms.

 

[NickK]

Well I have been in the industry for over 30 years and I would say most RFP's come out of organisations who have a predisposed point of view on the technology they will likely buy, but not all of them. My advice from over 30 years in the game is ignore the ones you didn't expect. You are likely making up the numbers in such situations, even if you are told "we really want you to respond", which typically means "we need to have a response from you" which is not the same as "you stand a chance'. The ones I have won I have usually known I am well placed because I have been aware of the companies ambitions, engaged at the top level and prepared well in advance of the documents coming out, sometimes months and even years ahead on major projects. Doesn't mean you win them all as you can still not be best fit but in the same way you can still win ones you are not favoured for. I have worked across public and private sector in that time and you know when a vendor has helped as usually there are reference points that use that vendors language.

Industry is full of corruption, it is naive to think otherwise sadly. Sometimes you find it and can act against it. In the years gone by I have actually seen a head of procurement fired for underhand activity but most RFP's will clearly state we don't have to pick the best one, the cheapest one, the one we should etc. etc. etc. You can win the process and lose the deal. I have also rejected RFP's from companies I feel are doing it wrong and in doing so got them to revise the whole process. Nothing better than saying "sorry, this is a terrible approach and I can't justify responding". Takes nuts but why consume a term of people on a war you never stand the chance of winning.

The case where a company employs a consultancy to write the RFP for them - a classic. They should be barred from applying for the work as it's not competitive.. but it does happen and does favour the consultancy's favourite partners.

Most large companies have a heap of internal governance and as part of that templates for RFPs. Often they will not take it in the vendors own format purely for the chaos it causes internally. Risk management in the procurement space forces parties to disclose partners for anti-competitive. However that still doesn't stop the "strategic solution" being won on the golf course even if it cuts the open cost save in half compared to the commercially more aligned option.

The main issues for us is tech companies just don't understand what it takes in a complex global environment with 276,000 employees!

 

[D.P.]

As someone who spends a lot of time responding to and winning deals via RFP processes I have to say this is claptrap. I've never once helped a customer game the process in this way and yet I have a very good success rate.

What does often happen is that a leading vendor sets the tone of the discussion and customers pick up on this, in terms of the language they use - which can look to the untrained eye like undue influence, bit it's just the customer picking up on and re-using the jargon.

This, we've been through multiple RFI/RFP and RFQs, it is completely standard for most industries to ask vendors for information and quotes before selecting a chosen vendor. I'm sat on a training responding to an RFI that has some very clear statements protecting anti-competitive laws.

Companies should never be getting a private company to write a RFP. That is often illegal, and I would run a mile if you are approached that way. The whole purpose is for companies to start with an RFI tender process, discus prospects with suitable responses, issue an RFP or 2, and go on from there.