RFP Process - are they legally binding?

[Domo]

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.

 

[The_Abyss]

The answer is no, but the better answer (which will still result in no) is to read the RFP and see what is being asked. In some industries, particularly creative, you can give away a lot of content through this sort of process.

 

[Basher]

No is the answer. And (unless it's a PubSec org) I would strongly advise to not respond at all unless you helped the customer write it.

 

[Domo]

No is the answer. And (unless it's a PubSec org) I would strongly advise to not respond at all unless you helped the customer write it.

Thanks for the advice. Can you elaborate on that last bit?

 

[Basher]

Thanks for the advice. Can you elaborate on that last bit?

RFPs are generally a process that the company has to go through to 'prove' they did due-diligence on vendor selection. Most of the time, their preferred vendor will help them write the RFP, they'll issue it and lots of other companies who will respond. This is just a box ticking exercise for the company who issued the RFP - no chance any vendor other than their preferred one is going to win.

Personally, unless I helped the customer write the RFP, I'll decline to respond every time - it's just a waste of the teams time.

 

[Domo]

Does that breach regulatory compliance of any kind? Or is it a matter of morals? Or is it standard and generally accepted? Just asking

 

[Jokester]

What industry are we speaking about?

The only situation I know of where a vendor might write a RFP is during FEED type engineering work so there would be a case of having ones feet in the door so to speak.

 

[Domo]

Risk and compliance. RE Basher's point - I know this sort of thing goes on, but I wonder how it's perceived and if it's permitted, e.g. bid rigging, leading to breaking anti-competition law.

 

[Basher]

Risk and compliance. RE Basher's point - I know this sort of thing goes on, but I wonder how it's perceived and if it's permitted, e.g. bid rigging, leading to breaking anti-competition law.

Outside of PubSec where there is more scrutiny, it happens in EVERY RFP process (certainly in IT). A preferred vendor will get the client to ask specific questions in the documents which only that vendor can deliver on or answer fully. It's fairly easy to spot based on the language used.

It's not worth worrying about, just get in early, set the criteria and win. If you're asked to bid where you didn't set the criteria, don't waste your time responding.

 

[panthro]

As someone who's been in the contracts and procurement sector for 15 years I'm sure that public or private sector an RFP response 9 times out of 10 (always all sections, all small print and documentation) is not legally binding because there is no offer and acceptance to supply goods or services. That's the next stage.

 

[panthro]

No is the answer. And (unless it's a PubSec org) I would strongly advise to not respond at all unless you helped the customer write it.

Are you talking about a specific industry, because that's never been the case anywhere I've worked and it's completely against competition acts in multiple countries.

 

[Basher]

Are you talking about a specific industry, because that's never been the case anywhere I've worked and it's completely against competition acts in multiple countries.

IT.

 

[El Pew]

Outside of PubSec where there is more scrutiny, it happens in EVERY RFP process (certainly in IT). A preferred vendor will get the client to ask specific questions in the documents which only that vendor can deliver on or answer fully. It's fairly easy to spot based on the language used.

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.

 

[Basher]

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.

It's not claptrap, it happens all the time. Any IT sales person will tell you the same, it's been like it for at least as long as I've been in the industry (10 years or so).

 

[Moley]

As someone who spends a lot of time responding to and winning deals via RFP processes I have to say this is claptrap.

What industry are you in? I've worked in IT for 32 years, usually for vendors and I've seen it consistently in this country and others (it's rife in the Middle East for example). Every software/hardware company nowadays has a dedicated Sales Engineering team and in all the teams I've worked with in the last decade, we have had specific training on spotting the 'landmines' dropped into RFP/RFIs by the preferred supplier - and we always have our own list too for when we are the preferred supplier and are asked to provide them to the customer. In the middle east I've been asked to provide customers (in government) with entire RFP documents before so they don't have to go to the effort of writing them......

 

[El Pew]

It's not claptrap, it happens all the time. Any IT sales person will tell you the same, it's been like it for at least as long as I've been in the industry (10 years or so).

I'm in IT sales, as a Sales Engineer, and have been for more than 10 years. Customers have ranged from central government through to megabanks, financial services, utilities, manufacturing, pharma, you name it. I must have gone through at least 100 RFPs and never once have I given a customer an RFP, even as a template. I'm not even sure I'd be allowed to do it, though that might be an internal anti-corruption policy.

Before the RFP process begins I've certainly planted seeds to get customers think how I want them to think about the technology, and then I've seen that reflected in the RFIs/RFPs that have resulted. And naturally there are instances where a customer has already decided which vendor they're going for and they'll just crib from our literature. But it's certainly not ubiquitous to have RFPs pre-ordained - I wish it was, it'd make my job easier.

 

[dowie]

And naturally there are instances where a customer has already decided which vendor they're going for and they'll just crib from our literature. But it's certainly not ubiquitous to have RFPs pre-ordained - I wish it was, it'd make my job easier.

Indeed, it would be rather bizarre to think otherwise... might as well just not bother with any sales teams in that case as you've either rigged the process or you've seemingly got no chance.

I don't doubt that perhaps it does go on but there seems to be very little to gain from it from the perspective of the client unless there are people within the client with a vested interest in keeping things a certain way... i.e. they're already very familiar and skilled at using a particular vendor's products and so want to keep that vendor or perhaps a possible vendor also has solutions that might displace/compete with something they've developed in house.

Though for big ticket items it is generally multiple people signing it off and the people with vested interests in opposing something tend to be at a lower level... having opposition from in house IT towards a solution isn't exactly uncommon but it doesn't necessarily scupper a deal.

As for lying on RFPs... hmm that happens a lot, you're not necessarily going to match all the criteria but you might well tick the box anyway with a view to making sure you do match that criteria if you land the deal. Also prompts some carefully co-ordinated sales pitches with pre-sales guys/devs saying "don't press this or this as it doesn't do anything... yet"

Not quite sure what the OP's position is though - @Domo are you helping a client (of yours) fill in and reply to an RFP for a potential client of theirs?

 

[El Pew]

As for lying on RFPs... hmm that happens a lot, you're not necessarily going to match all the criteria but you might well tick the box anyway with a view to making sure you do match that criteria if you land the deal. Also prompts some carefully co-ordinated sales pitches with pre-sales guys/devs saying "don't press this or this as it doesn't do anything... yet"

I won't lie on an RFP, but there are ways to talk around these sorts of limitations - so you can say "No, but we do X instead which is generally more efficient" or "We find that this requirement does not generally see much use in production environments, customers generally use X control instead to achieve more reliable results".

 

[Housey]

I'm in IT sales, as a Sales Engineer, and have been for more than 10 years. Customers have ranged from central government through to megabanks, financial services, utilities, manufacturing, pharma, you name it. I must have gone through at least 100 RFPs and never once have I given a customer an RFP, even as a template. I'm not even sure I'd be allowed to do it, though that might be an internal anti-corruption policy.

Before the RFP process begins I've certainly planted seeds to get customers think how I want them to think about the technology, and then I've seen that reflected in the RFIs/RFPs that have resulted. And naturally there are instances where a customer has already decided which vendor they're going for and they'll just crib from our literature. But it's certainly not ubiquitous to have RFPs pre-ordained - I wish it was, it'd make my job easier.

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.

 

[dowie]

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.

^^^More people should do this, even simply qualifying the potential client seems to be lacking sometimes. We had a whole sales team get sacked because they filled out an RFP then chased after a deal we had no hope of winning... not just something where we could have made some tweaks to satisfy the requirements albeit some Dev managers might grumble a little but something we were completely unsuitable for, like the core requirement being a minor part of our solution that we didn't cover well and our core solution being completely irrelevant to the client/bid. They ended up costing a 7 figure sum pursuing the bid though a combination of man hours from dev working on customisations through to flights/hotels etc.. for pre-sales people, consultants etc... the bid was lost and it became quite apparent afterwards that it was a complete long shot that shouldn't have even been pursued... so one morning there was a section of empty desks on the floor and the office behind them where there global head of sales used to sit was vacant!