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RFP 101

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RFP 101

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  1. RFP 101

    Cara Kaufman, Partner, Kaufman-Wills Group ALPSP Seminar: Art of Contract Negotiation 28 October 2010
  2. Overview Preparing an RFP to meet your needs Often the first step toward a successful negotiation The role of consultants in the RFP and negotiation process Negotiating to and through the initial contract and contract renewals
  3. What is an RFP? A request for proposal (RFP) is an invitation for vendors to submit a proposal to provide your organization with one or more goods or services Details the organization’s specific requirements for the proposed goods or services in strategic context Dictates or allows suppliers freedom to propose the methods, timetable, and budget for the work Leverages an organization’s negotiating ability and purchasing power with suppliers via the bid process RFQ (quote) | RFI (information) | RFQ (qualifications)
  4. RFP examples Contract publishing Commercial publishers University presses | nonprofits Editorial and production services Copyediting Composition Print | digital Sales and marketing Industry sales Content aggregators Institutional sales Licensing / buying technology Peer review systems Semantic tagging Data conversion Content management
  5. The process at-a-glance
  6. Steps to creating an RFP
  7. Elements of an RFP Organizational overview Business problem (opportunity) prompting RFP Results of any needs assessment conducted Schedule of important dates RFP response due Presentations/demos Decision expected Sale / transition
  8. Continued Contact names, sources/protocol for Q&A Instructions for organizing, formatting proposal Requirements Specific product/service/technical requirements Other assumptions and agreements Budget parameters, use of subcontractors, ownership, point of contact Documents required as attachments Sample reports, standard contract language, transition plan, references Basis of award of contract Lowest price, greatest financial return, highest quality
  9. RFP questions
  10. Packaging the RFP Print and/or eonly Cover letter/invitation Pre-qualify NDA Single document MS Word or PDF Linkable table of contents Tables to show history/trends Excel file for apples-to-apples comparison Concise and proofread
  11. What happens after vendors receive an RFP?
  12. Evaluating proposals
  13. Top 3 blunders
  14. Evaluating presentations/site visits The supplier Do you believe that the supplier’s mission is aligned with your mission? Will the supplier’s market position be helpful to you? Are the supplier’s office locations around the world well situated? The people Are the individuals with whom you will be working knowledgeable? Did the presenters work as a team? Can you envision yourself working with them? Do you think they would be communicative and responsive?
  15. Continued Quality Will the supplier uphold your high quality standards? Is their vision for the deliverable/s aligned with yours? Are the supplier’s products/services state-of-the-art? Capabilities Did the supplier provide a convincing plan? Does the supplier have the necessary expertise / control over subcontractors? Are you satisfied with how you will be treated vis-à-vis other customers? Can they deliver? The Financial Offer Will you receive complete and regular financial reporting? Are the costs/royalties/financial terms easy to understand? Are appropriate rights retained during and after the agreement period? Are there business terms that you would like to negotiate before entering into contract discussions?
  16. Why do organizations use consultants for RFPs?
  17. Consultant’s role in RFP Prepare and distribute the RFP Introduce structure and method to process Help identify appropriate recipients Gather information for RFP Prepare documents for approval Develop and monitor timeline
  18. Continued Evaluate supplier proposals Respond to suppliers’ questions Compare proposals Prepare narrative, tables, and spreadsheets Discuss with client, identify remaining issues Questions, revised offers Arrange for presentations, site visits Set expectations for client Moderate discussion following presentations Inform suppliers Provide feedback Negotiate agreement Review and comment Brainstorm solutions
  19. Steps in negotiation
  20. Negotiation styles Collaborative : negotiating for win-win Detached problem-solving where each party gains something of value Competitive (zero-sum) negotiating for win-lose Substance (eg, financial) is what matters; relationship unimportant Concession: negotiating for lose-win Avoidance, desperation, or not knowing what’s possible lead to loss
  21. Contract negotiating tips Reducing the stress levels Questions to bypass an impasse What is at the heart of your/my concern? What is the purpose of this clause? Can I explain to you the situation I’m worried about and can we put our heads together to think about how this situation could be avoided? If we removed the clause, would or could another clause come into play if we found ourselves in this (unlikely) situation? Is it time to brainstorm with some colleagues? “Approve” (revised) proposal Agree on all business terms before negotiating contract Communicate any truly nonnegotiable clauses before contract (good faith) Convert individual wants into shared problems Don’t rewrite unless you need to eliminate ambiguity or change the meaning Work with an attorney experienced in publishing
  22. Case report 1: contract publishing(what not to do) Huge manuscript backlog muddying financial waters Displeasure with incumbent publisher’s new contract offer, not communicated New publisher submits unsolicited bid; no established RFP or bidding process Incumbent publisher submits counter offer but still with terms not as positive as new publisher Announces change in publishers before business terms finalized New publisher reneges on offer Crawls back to incumbent publisher Incumbent publisher graciously honors Asks for additional concessions during contract negotiation
  23. Case report 2: contract publishing(dealing with the typically tricky clauses) Reuse of content Sublicensing rights New publications Satisfactory staffing Excess page costs Copyediting quality Online feature equity E-publishing formats Peer review system Transition costs (pre and post) Reporting Proposed “efforts” Mid-term changes Unprofitability clause Post-termination rights
  24. Thank you!