Request for Proposals Fundamentals Setting the Stage for Success

1. Request for Proposals Fundamentals Setting the Stage for Success Tyler Ahlborn, Nisha Thomas and Peter VanderVeer

2. Request for proposal • Request for Proposal (RFP) is generally used for the procurement of services or technology in situations where price is not the sole determining factor and the award will be based on a combination of cost and technical factors (Best Value) • Through its proposal, the bidder offers a solution to the objectives, problem, or need specified in the RFP, and defines how it intends to meet (or exceed) the RFP requirements

3. Program • Prologue - Best Value Defined • I - RFP Planning • II - RFP Components • III - RFP Evaluation & Selection Process • IV - Procurement Record

4. What is Best Value? • State Finance Law §163: “A best value award is one which optimizes quality, cost, and efficiency and typically applies to complex services and technology contracts”

5. PART I RFP Planning

6. RFP Planning Statutory preference is accorded in the following order: 1st Preferred Sources 2nd OGS Centralized Contracts 3rdAgency or Multi-Agency Contracts 4th Procurement Methods Prescribed by SFL

7. RFP Planning • Develop a procurement strategy • Develop a timeline • Conducting a procurement is a “Project” • Identify the events of the procurement • Effective planning/budgeting of time • Start with the end in mind

8. RFP Planning Issue RFP Amendment if necessary* Internal Approvals Draft RFP Release RFP Evaluation Begins Evaluation Complete CRAd SiteVisit* Respond to Questions* Proposals Due BusinessNeed Interviews* Implementation Questions Due* Other Approvals as required ITS, Civil Service, AG, OSC Distribute Proposals to Evaluation Teams Specification/ Requirement Development Develop Evaluation Guide/Instrument Monitor/ Manage Contract Develop Solicitation List Identify Evaluators Coordinate w/ Evaluators Coordinate w/ Evaluators *Optional

9. RFP Planning • Elements of the procurement process • Specifications • Requirements • Pool of Vendors • Funding stream(s) and associated requirements • Evaluation (Evaluators, Instructions, Execution) • Forms (e.g., Cost Sheet) • Procurement rules and regulations

10. RFP Planning • Contract Reporter • Procurement must appear in Contract Reporter at least 15 days prior to the due date of proposals • Develop solicitation list/letter • How can the RFP be obtained? • Designated contact person • Issue date, due date • Questions and Answers due date if applicable

11. Ticket to Success • Plan your work, work your plan • Identify and mitigate risk • Build in adequate time for internal/external approvals

12. PART II RFP Components

13. RFP Components • Table of Contents • Introduction • Statement of purpose • Calendar of Events • Date of Issuance • Date Questions and Answers Due • Date Responses to Questions and Answers Due • Due Date of Proposals • Agency Mission • Statement about the duties of your Agency

14. RFP Components Note: Build in adequate time for internal/external approvals

15. RFP Components • Administrative process • Restate the timeline • Technical Proposal submission requirements • Cost Proposal submission requirements • Single award/multiple awards • Criteria • Minimum qualifications • Specifications of services • Additional information • References • Contract terms and conditions • Questions & Answers • Issues raised may result in the issuance of an amendment to the RFP • Make any necessary change(s) • Distribute to potential vendor pool

16. RFP Components • Procurement policies, statutes & disclosures • Appendix A • Vendor Responsibility (GFO Section 16) • Procurement Lobbying Law (GFO Section 18B) • Iran Divestment Act (GFO Section 18F) • Sales and Compensating Use Tax (GFO Section 18D) • Debriefing Language • Protest Procedures

17. RFP Components • Procurement policies, statutes & disclosures continued • Other (as applicable) • HIPAA • Agency specific appendices • Consultant Disclosure Law (GFO Section 18C) • Prevailing Wage • MWBE (GFO Section 18A)

18. RFP Components • Non-negotiable Contract Provisions • Rationale • Concerns raised prior to bid submission • Avoid prolonged, fruitless negotiations • Save agency time and money • Prevent gaps in program/service delivery

19. RFP Components • Evaluation Criteria • Minimum qualifications (pass/fail) • Technical criteria • Cost • Multiple years – define escalation (e.g., limit annual increase to Consumer Price Index (CPI) as published by the U.S. Department of Labor.) • Escalation may be subdivided (e.g. CPI may account for 80% of the adjustments and fuel may account for 20% of the adjustments) • Relative importance – cost vs. technical • RFP must disclose the relative importance and/or weight

20. Example • RFP – Consultant services • RFP only specified that both hourly rate (cost) and qualifications of the consultant (technical) would be taken into consideration • The evaluation instrument stated that the agency had evaluated the proposals utilizing the following weighting in determining best value: • 65% Technical 35% hourly rate • It was determined that the successful proposer was a responsive and responsible proposer

21. Discussion • Approve the contract? • Request additional information? • Return the contract unapproved?

22. solution • Return the contract unapproved • Why • State Finance Law Section 163 requires that the solicitation identify the relative importance and/or weight of cost and the overall technical criterion to be considered • Course of action • Require a re-bid as the RFP failed to identify the relative importance and/or weight of cost and technical Fatal Flaw

23. RFP Components • Method of Award • Single award • Upon completion of the evaluation process, a contract will be awarded to the proposer whose proposal met all mandatory requirements and obtained the highest composite score, inclusive of both cost and technical • Multiple Award • RFP should reserve the right to make multiple awards • RFP should state the number or “up to” number of awards to be made and how work will be allocated among the vendors • MUST be determined prior to receipt of proposals and documented in the Evaluation Instrument

24. RFP Components • RFP language should: • Allow agency to reject any and all bids • Allow agency the right to request clarification • Allow agency to waive a mandatory requirement • If unmet by ALL proposers and non-material • Allow agency the right not to proceed with an award • Establish a minimum period of proposal validity (e.g., price firm for 180 days and/or proposal irrevocable for 60 days)

25. Ticket to Success • Review specifications – are they too restrictive or too general? • Be careful when using words such as “must, shall, may not, minimum, maximum” etc. to describe requirements • Know current State rules and regulations • Publish relative importance and/or weights • Establish/sync evaluation criteria with RFP specifications

26. PART III RFP Evaluation and Selection Process

27. RFP Evaluation & Selection Process • Critical steps in developing your evaluation strategy • Set the Technical/Cost ratio • Define the criteria – Mandatory (pass/fail) vs. Desirable (scored) • Determine distribution of points among criteria • Create key for assigning points within criteria

28. RFP Evaluation & Selection Process • Develop the evaluation criteria while developing the RFP • Must be clearly stated in the RFP • Must be important to the result you are seeking • Must be measurable • Pass/Fail • Scale

29. RFP Evaluation & Selection Process • Questions & Answers • Issues raised may result in the issuance of an amendment to the RFP • Review all evaluation criteria • Make any necessary change(s) in Instructions, Instrument, Score Sheets • Make sure all potential bidders receive a copy • Clarifications • Must reserve the right in the RFP • Cannot result in a material change to the bid • If cost proposal is extremely low, agency can seek verification from the vendor that they understood the intent of the RFP

30. RFP Evaluation & Selection Process • Mandatory Qualifications Checklist • Pass/Fail – Yes/No • If not met, disqualify • Disqualified proposals • Both Technical and Cost proposals must be submitted to OSC for all disqualified vendors

31. RFP Evaluation & Selection Process • Technical evaluation forms must: • Identify the vendor and evaluator • Have a reference list of points and meanings • 5 points = exceeds all requirements • 4 points = meets all requirements • 3 points = meets most requirements • 2 points = meets some requirements • 1 point = meets few requirements • Have a space for the evaluator to enter his/her rating • Have adequate space for comments

32. Example • RFP – Auditing Services • RFP specified a relative importance of: • 60% Technical 40% Cost • RFP identified the following criteria to be evaluated: • Relevant experience • Approach to specific project (understanding scope) • References • Cost • Scoring guide for technical criteria: • Excellent Response = all available points • Good Response = half of available points • Unacceptable Response = zero points

33. example

34. discussion • Approve the contract? • Request additional information? • Return the contract unapproved?

35. solution • Return the contract unapproved • Why • Range of points assigned were not allowed by the scoring methodology as defined in the evaluation instructions • Course of action • Agency should re-score proposals in accordance with the evaluation instrument

36. RFP Evaluation & Selection Process • RFP should have a cost form • Agency develops cost form that allows for equivalent cost comparison • Costs submitted should be complete • Costs submitted should be meaningful • Cost components not evaluated should not be in the resulting contract

37. RFP Evaluation & Selection Process • Developing a Cost Form • Examples: Job Titles and Hourly rates, Deliverable based, Unit Price, Categories • Understand what you are really asking for • (ie: what is a page? a sheet? a document?) • Capture the cost of all major components • Capture the accumulated costs of all minor components

38. RFP Evaluation & Selection Process • Cost score is a calculation, not an analysis! • Recommended Formula for Cost Score • Max Points * (Low Bid ÷ Bid Being Evaluated)

39. RFP Evaluation & Selection Process Example of Cost Score Calculation 70% Technical / 30% Cost Cost Score = Max Points * (Low Bid ÷ Bid Being Evaluated) Cost Score = 30 * (90 ÷ 100) Cost Score = 30 * (.9) Cost Score = 27

40. RFP Evaluation & Selection Process • Do NOT score cost proposals based on a key (as below). Formula should show a relationship among the bids. • $10,000 = 30 points • $10,100 = 25 points • $18,500 = 20 points • $18,501 = 15 points • $21,700 = 10 points • $21,725 = 5 points • $21,750, $25,000 and $31,622 = 0 points

41. RFP Evaluation & Selection Process • Who should be an evaluator? • Someone with: • Expertise • Time to participate fully in the process • No conflict of interest • Different teams of evaluators can be used for different criteria but the same evaluators must do any single criterion for all bidders.

42. Example • RFP – Market assessment of a new program • RFP specified a relative weight of: • 65% Technical 35% Cost • Proposals were to be evaluated by a team of 4 evaluators • Average score of the Evaluation Team was to be used in assigning the overall technical score • Evaluator 4 had a conflict of interest with one of the proposing companies and therefore did not evaluate this proposal

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44. discussion • Approve the contract? • Request additional information? • Return the contract unapproved?

45. Solution

46. Solution • Return the contract unapproved • Why • State Finance Law Section 163 requires that there must be a balanced and fair method of award. • Course of action • Award to Bidder D

47. RFP Evaluation & Selection Process • Instructions to evaluators must: • Define decision parameters and explain expectations • Define the use of decimals if they will be allowed • Evaluate proposals against standards set in the RFP, not against other bids • Be submitted to OSC with procurement package

48. RFP Evaluation & Selection Process • Less than three proposals received • Submit justification of cost • Justify limited response • Canvass non-responding vendors • Only one proposal received • Must evaluate it • Submit justification of cost • Justify limited response • Canvass non-responding vendors

49. RFP Evaluation & Selection Process • Ties • If two offers’ Composite scores are tied, the award shall go to bidder with the highest Cost score (lowest price) • If Technical and Cost scores are both the same, agency must have a pre-defined tie-breaking mechanism • May have different tie breaking mechanisms for different types of procurements

50. Ticket to Success • Develop evaluation instrument prior to issuance of RFP • Document your process • Ensure evaluation criteria are measurable • Make changes to relevant documents and distribute them to all potential bidders if the Q&A results in changes • Understand your chosen formula and carefully consider the weighting • Avoid non-standardized technical and cost evaluation forms • Using Excel? – Check your formulas/number transpositions • Mandatory requirement – make sure you NEED it • Check your math!