Category: Chapter 8: The Dreaded RFP (Request for Proposals)

An RFP is a “request for proposal.” It is most commonly used by government agencies, but you’ll also find them applied in nonprofits and some for profit entities. They are a blight on the crop. 

These are usually issued by low-level people who have an arbitrary alternative in mind. They’ll issue an RFP for a “two-day retreat for team building.” And they’ll have criteria that match the worst of the want ads: “The successful bidder will have 10 years of team building experience with nonprofit arts groups.” That experience may be desultory and with arts groups that collapsed—no matter. These are input driven monstrosities. The questions will include such things as: “How many people will work on the project, will they commute or require travel, will they spend an entire day on-site, and will they eat bread crusts or cut them off if they dine in the cafeteria?” 

Thankfully, there is hope. The FAR Act (Federal Acquisitions Regulation) states that even government purchasers in the United States may choose vendors based on value and not solely price (but you’re still a vendor). But a great many agencies and other organizations still prize RFPs as a way to fairly evaluate suppliers. This may work for people who pave parking lots or sell plants for the hallways, but not, unfortunately, consultants. 

The best way to circumvent RFPs and render them irrelevant is to be a “sole- source” provider. Such a provider is exempt from competitive requirements be- cause of a uniqueness not found among competitors, rendering competitive proposals moot. 

For example, Jim Collins wrote Good to Great, Michael Hammer wrote Re-engineering, and I wrote Million Dollar Consulting. We are unique in having written those books and the attendant intellectual property. Hence, we are “sole sources” and may be hired directly by the interested party, despite rules for competitive proposals in other circumstances. This applies to books, intellectual property, models, experiences, accomplishments, and so forth. An organization can hire you directly if you can justify that you’re the only one of your kind. That’s surprisingly easy to do, and far superior to the RFP morass.

Case Study: The Navy and Me 

Many RFPs are still in hard copy and require painstaking attention to the requirements. For about a year, the Navy sent me RFPs for a variety of projects. I ignored every one. It would have cost me more to try to compete for them than the project was worth. 

Finally, the Navy sent me an inquiry. They wanted to know why I wasn’t responding to their RFPs. And would I please fill out my response in triplicate and send it back! 

One of the advantages of developing intellectual property and writing commercially published books is that you can stand out in the crowd. 

If you’re approached by an organization that wants you to compete in the RFP process, your immediate position should be that you can be considered a sole source alternative. Are you arranging your body of work to support such an assertion? 

Figure 8.1 is a simple graphic. 

FIGURE 8.1 Sole-source material 

It depicts a hiring and delivery of results process. There’s nothing earthshaking, but if this were your property with appropriate supporting material you could make a case for sole source. It doesn’t have to be elaborate or unprecedented. It just has to be yours in a configuration that’s distinct and yours. Protection such as copy- rights, service marks, trademarks, and registration further your claims.

RFPs can appear to be manna from the skies, offers that just descend on you. But they are mostly time wasters and chimeras. Even if you’re successful in your  bidding, you’ll find that costs (fees) are fixed and unattractive. 

My advice is to refrain from responding to most RFPs unless you can easily make the case that you are a sole-source provider and the prospect readily agrees to that. In the rest of this chapter, I outline how you can deal with these random events if you insist. But my warning early on is that these are tedious and futile endeavors unless you can put yourself in some advantageous position.

The worst part is that these RFPs are almost always generated by low-level people who use all the wrong criteria in evaluating the applicants. They are not buyers, and will merely cull the applicants to present a feasible group to the real buyer. There are no relationships possible, and the purchase might as well be made from a catalog. 

Fortunately, these are rare. If you find yourself in a market where they predominate, such as state government, I’d find an alternative market. You simply can’t gain sufficient or valuable enough business responding to conventional RFPs, because neither the volume nor the quality (high fee) is attainable. But there are ways to circumvent this process, and we’ll take a look at them further on. Don’t feel as if you’re restricted to a conventional RFP response. If you can’t prove that you’re a sole-source provider, there are other options available. At least make the attempt to take these poor propositions to turn them into more valuable proposals. 

I’ve never met anyone, in 25 years in this business, who has a viable and lucrative consulting practice based on a preponderance of RFPs. You can look at them as Really Foolish Positions. 

Another method of dealing with RFPs is to make them into bespoke offerings! (I rarely get to use that wonderful word in a sentence!) 

Some buyers will love you but they’re forced to use a competitive bidding system because of strict organizational rules. In this case, have the buyer (not some lower level committee) “design” the RFP around you. Even if you don’t qualify for “sole-source” purchasing, this is the equivalent. 

The RFP in this case can list criteria such as: 

• Worked for extended periods in London and Sydney, where our two major overseas offices are located. 

• Speak Spanish, where our expansion plans are highest priority. 

• Has coached at executive level in the pharmaceutical industry. 

You get the idea. There will hardly be hundreds of people applying. That means that you can pretty much have the field to yourself. 

This approach requires a tight relationship with the true buyer, and that is often much harder in RFP situations. We talk later in the chapter about how best to at- tempt this when you receive an RFP of interest, but let’s talk here of the “front end,” before it’s even issued. 

The entire point of market gravity is to create interest in your work among economic buyers and, once contacted, to ascertain who the economic buyer really is. If you’re able to do that consistently through your speaking, publishing, networking, Internet activity, and so forth, you will meet buyers who can write a check immediately and others who must go through the competitive bidding process. 

The good news is that the bidding process must be instigated by someone, and you’ve found that someone. So when the buyer explains (or complains about or bemoans) the need to create an RFP, suggest that perhaps you can recommend some important criteria based on what the buyer has explained about needs. (Many buyers don’t need this hint, believe me.) 

The two of you can then collaborate on getting you hired. In many cases, the buyer can even create work flow that will enable your value-based fees to be readily accepted (since RFPs are notoriously based on hourly and daily rates otherwise). Even if there are a few other consultants around with similar credentials and experiences, the odds are that: 

• They aren’t going to learn of this RFP. 

• Even if a couple of consultants turn up, they don’t have the relationship with the buyer that you’ve established.

• The odds are still better at one in three than one in a thousand. 

You can see how much of an advantage you’ll get from market gravity and be- spoke RFPs than you would have in just responding to the ones figuratively marked “occupant” when they hit your company mailbox! 

Some of the characteristics useful in helping the buyer “design” an RFP for you, in addition to the precise nature of the project: 

• Language capability
• International experience
• Industry experience
• Professional (acknowledged) credentials
• Publishing (articles, columns, assuming no commercial book)
• Education
• Experience running companies, sales forces, start-ups, and so on

Once you begin to combine several of these you’ve narrowed the field by leaps and bounds until it’s almost the same as, “Get me James McGee.” It can be that specific. 

This approach to RFPs is what I call “preventive,” because it focuses on dealing with them before they’re issued. (So does sole source in most cases, because after an RFP is issued it seldom calls for “a book published on lean manufacturing in the construction industry” as a criterion—they are by definition more generic.) We talk about “contingent” approaches, what to do after you receive an RFP that is very generic, in the last part of this chapter. 

The case I want to make here is that RFPs are a waste of time only if you surrender to their terms and conditions, and the very nature of the beast. If you prepare yourself to deal differently before and/or after, you can achieve success with these. It’s not unusual for a series of RFPs over the years to be created just for you once you’ve done a great job with the initial project.

But you cannot take this particular preventive action with a committee, non buyers, or after the fact. Bespoke RFPs are possible only under these conditions: 

• An economic buyer has come to you or you’ve reached one yourself, prior to any RFP being issued.

•You establish rapport and a trusting relationship with that buyer to the extent that the buyer is prepared to design an RFP that will enable you and few others to be considered. 

• You suggest and possess the distinctive features that design the profile of the successful candidate.

• The basis is so clear and reasonable that even a screening committee would have no hesitation at passing your name on once you’ve complied with the RFP requirements for submission. That same committee will eliminate virtually everyone else.

To place things in perspective, I’ve succeeded with this approach on a handful of occasions before I became a true sole-source provider through my range of books and unique experiences. But during that period I was never successful on any RFP for which I merely complied with submission requirements, even though I may have been superbly well qualified for the project. I suspect that most of the problem was around my fees. 

I offer this as an alternative, not a panacea, especially where you’ve met an interested buyer first who now needs to get you through the competitive bidding process. 

There are times when the best way to win the bid on an RFP is to offer even more value than the prospect requested. 

Once you comply with the details requested in an RFP, always try to add additional value. The purchasers are not required in most cases to choose the lowest proposal, as if this is a highway paving project or a request for textbooks. They can identify and choose the highest value that represents the greatest return for their in- vestment. That’s where your creativity can turn the tide.

Here are factors to consider that are often either overlooked or considered implicit in an RFP that your competitors might not highlight or address:

• Preparation work.
• Surveys of employees, management, customers, suppliers.
• Tests of assumptions for validity.
• Reinforcement tools on the job.
• Monthly “boosters” via newsletter, special website, e-mail, and so on.

Case Study: USA Today 

I had been contacted by someone I knew at the newspaper USA Today and asked to bid on an RFP. I agreed and did so, and was named one of the finalists, so I was invited to make a presentation to the inevitable committee.

About 30 people sat around a U-shaped conference table with the finalists, one by one escorted in and out as if they were Grand Jury witnesses in some organized crime ring, presenting their best arguments. I alternately felt like a criminal and a performing seal. 

Yet my contact told me I had an “inside track” from what she had seen, and wanted me to throw all of my energy into this. I did, everyone asked questions and made notes, and I left and waited. And waited. Remember, the longer it takes, the more bad things happen.

Finally, I called my contact who sheepishly told me that another firm had been chosen. “Was I just too expensive?” I asked. 

“No, the winners were more expensive than you,” she confided. 

Now I was stunned. “How could that be?” 

“Well, they offered to also train the managers of the people going through the initiative to better reinforce the results on the job.” 

“But the RFP didn’t request that!” 

“That’s why the committee liked it so much.” 

• “Audits” at fixed periods (quarterly) to assess progress and fine-tune.
• Post-project testing to compare to prior baselines for improvement.
• Compilations of best practices.
• Access to you for key people for given time periods.

You get the idea. None of these is especially labor-intensive or difficult, and most require no on-site presence at all, or only occasional visits. You can often derive these from reading the extensive background provided with most RFPs or through public meetings (see the following segment). 

You can give options in your responses to RFPs, and I urge you to do so if you’re going to pursue this route at all. The trick is to ensure that your first, lowest fee option meets all the project’s objectives. Once you’ve established this, you can build on the value in your following options. You don’t have to provide a “take it or leave it” or “make or break” proposal where the extra value you can provide is part of the basic package. This gives you two “shots” at the prize: The basic option for those evaluators who seek nothing more, and advanced options for those who would love to see additional value.

You never know what’s going to constitute a “hot button.” 

When providing “extra” value, focus on two conditions: 

1. Something of a mild surprise to the evaluators. “Interesting, we never considered that, but it’s a great idea,” is the kind of response you’re seeking here. That should set you apart from the competition. 

2. Something in your own suite, so that it’s easy for you to provide and not something that will erode your margin and keep you competitive.

Complete the RFP as you normally are requested to do, but use an “addendum” or extension to demonstrate your options and additional value being suggested. 

I suggest one more opportunity to stand out in this crowd. It doesn’t always work, but it rarely hurts, and you can use your own judgment: I often provide a copy of my own proposal format to accompany the RFP response. 

I actually tell the evaluators that, for their information and for the sake of comparison, I’ve also included a copy of my own proposal format for the project, which in effect, can serve as an executive summary. I like them to see the brevity and focus on objectives, measures, and value. And I like them to see the options in this con- text. It can often help you to stand out in a crowd.

One more key point before we move on: You’ll usually have to “distill” the conceptual agreement on your own. That is, there is no trusting relationship with a buyer in the example I’m giving here, so you will have to “create” the objectives, measures, and value as you see fit from the information provided. The probability is that it’s not presented in this manner, but rather as an arbitrary alternative, which has prompted the RFP. But the prompting occurred to produce some results, and you should infer what that is and work from there.

Even with an RFP, the evaluators are going to be better able to analyze your proposal and your worth if they can see their ROI, and the best way to do that is in our format, not theirs. So don’t be bashful about creating your own objectives, measures, and value and creating the approach that puts you in the best light. There are objectives, they just have to be unearthed from the rubble and detritus of the RFP process!

So get your mining gear and get moving. 

Most RFPs are accompanied by public meetings, at which prospective bidders can hear background and ask questions. They are almost never run by a decision maker, but rather by members of the committee responsible for issuing the RFP and vetting responses. 

The meetings are very inconvenient, in that they may be held in the home base of the entity, say, Washington, DC, and you happen to be in San Francisco or London! However, there are often company or even governmental rules mandating such a meeting, so it’s held. The assumption is also in place that large firms are going to respond, and large firms have offices in many cities and the capacity to put people on airplanes to attend the meeting. Occasionally, there is more than one meeting in more than one place. 

You can let the issuers know that you can’t attend the meeting and request copies of any handouts or a summary of any additional background provided. There may even be copies of visuals available. Sometimes you can obtain these items, sometimes not. You can also have someone else attend in your place, and they simply need to identify themselves as your representative, and not need to be an employee of your firm. This is a good reason to consider a colleague who is a member of a trade or professional association to which you belong, and a favor you can reciprocate in some manner. You can prepare this person with some questions, they can gather up materials, and provide insights on who else was there and what kinds of questions were asked.

If you can attend the meeting, I suggest that you arrive early and remain later. Talk to the organizers informally if it’s permitted. Among the information you’d like to learn would be: 

• How important is price and how important is value? 

• What underlying needs prompted the alternative represented by the RFP?

• Who is the primary force behind the request (e.g., who is the real buyer)?

• What else is going on that has bearing on the request (what additional value might be powerful)?

• What has characterized winning bids in the past in this organization? 

• What are the procedures after proposals have been received? 

Also try to network with other attendees. Try to understand: 

• What type of organizations are attending the meeting and might bid? 

• Have they worked with this organization before? 

• What are the distinctions of working with this organization? 

• What is their usual process after receiving proposals?

•  Are there likely to be further attempts at negotiation? 

Listen to the questions asked in response to the information provided at the meeting, especially from those who have successfully bid in the past. These responses will give you some insights into the key buying considerations. 

If you can establish any kind of relationship with any of the client’s people, do so. There usually is no restriction on your contacting them at later points with questions or clarifications. 

Here are seven techniques that may or may not be possible and allowed, but are worth pursuing if you are intent on bidding on such projects: 

1. Find out who the actual buyer is and whether a personal meeting can be arranged.

2. Introduce yourself and do something to create an impression with as many of the committee members as possible, so that when they see your proposal they can relate to a name.

3. Find out about the “automatic rejection” issues, for example, failure to provide evidence of malpractice insurance, or failure to provide a banking reference. Often, they don’t ask you to resubmit, they simply eliminate you.

4. Find out the deadlines and time frames the group has in mind. There will be requests for your time needs, but if you can match them up to the general expectations of the committee, that will help.

5. Explore what other projects or initiatives are taking place, and their relationship to the one you’re bidding on. You might be able to suggest synergies in your proposal.

6. Make sure that you learn the buyer’s name and position, because you might want to try to bypass the process (especially if you discover that you just may be able to qualify for sole-source status).

7. Try to have a clear understanding through your formal and/or informal questioning as to what the preferences are that aren’t stated in the RFP. These may include length, appendices, charts, staff resumes, testimonials, or lack thereof. Don’t shoot yourself in the foot if you don’t have to!

Public meetings can range from very informative to the dullest couple of hours in your life. They may be run by one low-level person, or by members of the committee issuing the RFP and, in rare cases, by the ultimate decision maker. 

My advice is to avoid RFPs in general unless you can take advantage of some inside advantages, such as I described earlier in this chapter. But if you insist—or have no choice because you deal primarily with government or certain nonprofit entities—then attend those meetings that: 

• Are reasonably inexpensive to attend.
• Demonstrate some advantage in your presence.
• Represent RFPs that you feel you have a good chance for success.
• Provide a unique insight or relationship that cannot be attained merely by securing the handouts.

It always helps to know “when to hold ’em and when to fold ’em,” so I’d be doing you a disservice if I didn’t make it clear when you should take your chips and walk away from the table. 

This chapter on RFPs is about one-tenth of this book, and will probably be far less than that in most of your businesses and markets. I wanted to equip you with some of the top devices and approaches for maximizing your success should the proper circumstances present themselves. 

However, I want to end this chapter with the advice that you will not grow a major business by responding to RFPs. There are firms that do this frequently and well, but they are very large, have other diverse income streams, or are highly specialized to work in government, institutional, nonprofit, and similar arenas. For solo practitioners these can at best be a peripheral and rare source of income; for boutique firms, perhaps a bit more. If you’re not a sole-source provider, and can’t have “bespoke” RFPs crafted for you, then this is not a propitious marketing endeavor. 

Frequently, newer consultants will ask me about the viability and sustainability of a given market, such as education, or nonprofit, or government. I tell them that these are not pragmatic and high-potential choices. They argue back that they are passionate about them and: 

• Know people making millions in that market.
• Can make it work.
• Would have the market to themselves.
• Are better than anyone else in the market.

Sorry, no cigar, not even close. 

First, talk is cheap, and there aren’t people making millions in those markets with the exception of some very large or highly specialized firms. 

Second, passion is wonderful but not an anodyne. You can be passionate about flying, but flapping your arms and jumping off the garage will simply make you a public spectacle if you’re lucky, and a corpse if you’re not. 

Third, having 100 percent of nothing is not valuable and you wouldn’t have the entire market no matter what you think. 

Fourth, I admire the high self-esteem. 

People have long asked me how to make a lot of money. I tell them not to find a way to make a lot of money and try to become passionate about it, but rather to find something they’re passionate about and try to make a fortune doing it. That may seem to contradict what I’ve written above, but it’s highly consistent, in that what you’re passionate about also has to have a viable market and high-value need. I’m passionate about exotic cars and electric trains, but I don’t attempt to make my fortune by advising on either. These are avocations, not occupations.

Glossary 

Avocation: A hobby or pastime that provides emotional gratification and that needn’t provide income or career opportunity. Some avocations may lead to occupations. 

Occupation: A person’s usual work, job, or business that provides the financial sustenance to support a chosen lifestyle.

My point here is that RFPs are not likely to be able to sustain your occupation, in this case, consultant (or coach, facilitator, advisor, and so on). They are remote possibilities, which, on special occasions and/or at certain points in your career, may yield additional revenues and profits. They are not a fundamental marketing avenue nor source of income. 

Run for the hills when you find: 

• Your primary pipeline is “clogged” with RFPs.
• You are spending more than two hours a week on RFPs.
• You actually seek them out and place yourself on lists to receive them.
• Most of your delivery work is for RFPs.

Among the problems for you as an independent consultant or boutique firm owner are that even if you’re successful in attaining these projects, the profit margins are inevitably thin. If you’ve made a mistake in calculation, or allow scope creep or scope seep to develop, it’s not uncommon to actually lose money when delivering RFP projects.

You also will seldom receive referral work, which is the important second part of most sales when you close new business. You’re working with low-level people, rarely meet a buyer, and the process is such that the only referrals you’ll receive are to be on other RFP invitational lists, not for any direct business. 

Although electronic submissions have negated the old “fill this out in triplicate” needs (in some, but not all cases, by the way), you’ll still find these highly labor intensive to complete, with a degree of detail almost unimaginable (e.g., what will occur in the morning session from 10 to noon; where will lunch be served; provide 12 references for whom you’ve performed this exact kind of work). 

These projects invariably require—demand—that you specify exactly how much time you’ll be on-site and someone—you can bet on this—will monitor these appearances. The labor intensity is severe. If you do not provide the agreed-upon number of days—even if all other metrics are being fulfilled—the client may ask for additional time or withhold some payments. 

Payments are highly delayed. That includes initial payments, in-progress payments, and expense reimbursement. Forget about your dates, your amounts per payment, your terms. Not only will these be stipulated, but they’ll often be abrogated by the client! You can complain all you like, but you have no buyer to provide clout and no leverage with anyone. 

Projects can be delayed or even cancelled unilaterally. There is usually “boilerplate” language about this, but it doesn’t matter. You’ll be notified and expected to accept the decision. 

I paint this dismal picture deliberately, because RFPs are situationally attractive, but not regularly beneficial. They’re often the last resort of consultants who fear an empty pipeline or lack of business. But they actually can detract from marketing and business, and steal needed time from more pragmatic and profitable business alternatives. 

You’ve been apprised. RFP: Really Finicky Prospects.  

Notes 

1. I’m talking about MBA and PhD, not an alphabet of honorifics bestowed by entities such as “coaching universities,” which no buyer has ever heard of. Every time I see three or more initials I can’t readily identify, I get suspicious about credentials.

2. Note that I refrain from saying “buyer” because you’re really not dealing with one directly.