RFPs Will Kill Us All(bigbangtechnology.com)
bigbangtechnology.com
RFPs Will Kill Us All
http://bigbangtechnology.com/post/rfps_will_kill_us_all
38 comments
> because RFPs are simply the way consulting works.
Not all the time. I never respond to public RFPs, and neither does the OP. Apparently in our (separate) niches, you can get by just fine.
Agree with your point about supply and demand, but good hackers are (nearly) always in demand, and so can nearly always find work. It's the strange outsourced companies that spend all their time searching for work that end up responding to RFPs, and that's dangerous even to clients.
Look at it this way: if you have a pool of proposals sitting on your desk, 90% of which are from firms that are simply incapable of doing the job[1], and you are a business/nontechnical chap, it's going to be difficult to find the 10% who are capable, let alone competent.
Meanwhile, technical guys who are good hackers but don't understand this see lots of firms sending out and responding to RFPs and think this is how it works, so I guess we have to do it too.
[1] http://www.elance.com/php/search/main/eolsearch.php?matchTyp...
Not all the time. I never respond to public RFPs, and neither does the OP. Apparently in our (separate) niches, you can get by just fine.
Agree with your point about supply and demand, but good hackers are (nearly) always in demand, and so can nearly always find work. It's the strange outsourced companies that spend all their time searching for work that end up responding to RFPs, and that's dangerous even to clients.
Look at it this way: if you have a pool of proposals sitting on your desk, 90% of which are from firms that are simply incapable of doing the job[1], and you are a business/nontechnical chap, it's going to be difficult to find the 10% who are capable, let alone competent.
Meanwhile, technical guys who are good hackers but don't understand this see lots of firms sending out and responding to RFPs and think this is how it works, so I guess we have to do it too.
[1] http://www.elance.com/php/search/main/eolsearch.php?matchTyp...
Knowing what I know about the bill rates for the kind of work we do versus the kind of work you likely do, I'm going to humbly suggest that we're in more demand than you are (not a value judgement, just an observation about scarcity).
We absolutely do respond to RFPs, when they're for projects we want to work on or clients we really want a relationship with. And we always spend serious otherwise-billable time on proposals, even though that's the same speculative work that this article argues against.
It's important to us to be easy to work with, because we want good projects. We don't want to confine ourselves to whatever lands in the margins of "unusually liberal clients"; those clients don't necessarily have the best projects.
I read the other post referenced on this thread, and so I'll add that being able to smoke out the bogus RFPs you shouldn't waste time responding to (because they indicate inept purchasers, or, for instance, because they probably mean the client is in the tank for another vendor) is just one of those things you need to be able to do to succeed as a consultant.
We absolutely do respond to RFPs, when they're for projects we want to work on or clients we really want a relationship with. And we always spend serious otherwise-billable time on proposals, even though that's the same speculative work that this article argues against.
It's important to us to be easy to work with, because we want good projects. We don't want to confine ourselves to whatever lands in the margins of "unusually liberal clients"; those clients don't necessarily have the best projects.
I read the other post referenced on this thread, and so I'll add that being able to smoke out the bogus RFPs you shouldn't waste time responding to (because they indicate inept purchasers, or, for instance, because they probably mean the client is in the tank for another vendor) is just one of those things you need to be able to do to succeed as a consultant.
Different markets lead to different practices.
I would imagine that good clients in security/pentesting fields probably have well-written RFPs, so an RFP in a market like this would be a positive indicator for a client.
In contrast, for web and iPhone projects (what I've been doing lately), RFPs are a very strong negative indicator. I have yet to find a well-written iPhone RFP.
I would imagine that good clients in security/pentesting fields probably have well-written RFPs, so an RFP in a market like this would be a positive indicator for a client.
In contrast, for web and iPhone projects (what I've been doing lately), RFPs are a very strong negative indicator. I have yet to find a well-written iPhone RFP.
I don't know, and that's a good question. Most security research proposals I've seen are crap, too. But then, in competitive proposal situations, we tend to win. So I'm an advocate of competitive proposal situations, be they formal RFPs or otherwise. =)
Any pointers on how to identify clients already in tank with another vendor? Being overly specific in the RFP and demanding the exact features a vendor has is a clear giveaway but I am wondering if there are any other signs.
I am new to this RFP business.
I am new to this RFP business.
We get on the phone before we respond to expensive RFPs, and there are questions you can ask (incumbent vendors, past experience with vendors, is there a formal requirement for the RFP, or do they genuinely want real proposals, etc).
On "real" RFPs, especially if you have a good shot, you'll find the purchaser you talk to is accomodating; they'll set aside time for calls to answer questions, and they'll do a good job with your Q&A submission (as a general rule, real RFPs have Q&A phases, though note that you never know whether your Q's are going to other vendors too).
There is an old negotiating trick a bizdev guy taught me once, which is, if you want to figure out whether a deal is real or whether the other side is just wanking, figure out a reason to schedule a meeting on a Saturday. If the deal is big and the other side is serious, they'll do it. Similar idea here, although less aggressive.
If your firm's way of handling the RFP process is to simply pick up the forms off some website, mail them in, and hope, then yes, I can see how the RFP process would upset you.
On "real" RFPs, especially if you have a good shot, you'll find the purchaser you talk to is accomodating; they'll set aside time for calls to answer questions, and they'll do a good job with your Q&A submission (as a general rule, real RFPs have Q&A phases, though note that you never know whether your Q's are going to other vendors too).
There is an old negotiating trick a bizdev guy taught me once, which is, if you want to figure out whether a deal is real or whether the other side is just wanking, figure out a reason to schedule a meeting on a Saturday. If the deal is big and the other side is serious, they'll do it. Similar idea here, although less aggressive.
If your firm's way of handling the RFP process is to simply pick up the forms off some website, mail them in, and hope, then yes, I can see how the RFP process would upset you.
[deleted]
That's great advice. Thank you!
If the RFP is being issued by a government agency, assume that the answer is always 'yes.'
Personally, the only reason I'd ever recommend responding to [a public-sector] RFP is if it's a hoop you need to jump through in order to formalize a deal that's already been effectively struck.
Personally, the only reason I'd ever recommend responding to [a public-sector] RFP is if it's a hoop you need to jump through in order to formalize a deal that's already been effectively struck.
If anything I think you're probably underestimating the extent to which GSA-style RFPs are rigged. I tag-teamed a bunch of times with our FedGov sales guy at the last company I was at, and we closed deals at the Pentagon and elsewhere, and (a) the stories you hear are ridiculous (like the companies that pay, say, an Inuit to be on the board so they can get some obscure diversity credit), and (b) even our company, which had multiple tens of millions of dollars in both funding and topline revenue at the time, had to work through a subcontracting arrangement.
I work for a publicly funded institution, in our jurisdiction we have to go through the RFP process. It is either an RFP (where we are allowed to do an evaluation of who "best" met the requirements - using a pre-defined scoring criteria) or a straight tender where we have to pick the lowest bid that meets the requirements.
I sympathize that it is very difficult to produce a proper response to an RFP, however as one who evaluates those responses let me tell you it is quickly evident which vendors spend the time to do so. It is also painful on the client side to prepare the criteria on which to fairly evaluate the responses.
It is an imperfect process and definitely more of an art than a science but the good news is that a well-defined RFP will often signal a client who understands their requirements.
I sympathize that it is very difficult to produce a proper response to an RFP, however as one who evaluates those responses let me tell you it is quickly evident which vendors spend the time to do so. It is also painful on the client side to prepare the criteria on which to fairly evaluate the responses.
It is an imperfect process and definitely more of an art than a science but the good news is that a well-defined RFP will often signal a client who understands their requirements.
Most consultancy firms that don't respond to RFPs eventually die. Of those firms that survive, they could be viewed as a collective of successful freelancers. There typically is not enough revenue to grow the company beyond the founding consultants because the project budgets that they deal with are typically $15K to $50K. You can definitely get away with not responding to RFPs if you're only ever dealing with budgets of tens of thousands of dollars. Also, an RFP is a way for customers to weed out the "I just quit my day job at an agency and started my own consulting company" firms. These customers want to deal with bigger firms because they expect these companies to be around for a while and provide support years down the road. A bigger company can afford to devote a few employees for a couple of weeks to address an RFP properly.
I thought we put a lot of effort into RFPs, but wow, 2 employees 2 weeks is crazy. For us, it's more like 1-2 days.
Depends on the project. A lot of website RFPs can be done in a crunch session of 1 to 2 days. I've had to bid on systems that interacted with assembly lines and ones that involved dealing with the government and getting security clearances. These latter two took 2 calendar weeks although the people involved in putting together the RFP were definitely not working full time on it until the last minute. All in all you might have 1-2 days of actual work, 1-2 days spent Q&A attending meetings with the client and other potential vendors, etc. The time can add up.
I have seen one ridiculous "RFP" that a government agency up here put out recently in which they wanted potential vendors to essentially do 6-8 months worth of work and if they landed the project, they'd end up with a long term multi-year contract. We're talking tens of millions of dollars here, but still, that one struck me as quite the lottery and I'm pretty sure the only companies that responded to it were the big names consultancy firms.
EDIT: here's the results of that RFP...whaddaya know look which firms won the bid: http://www.newswire.ca/en/releases/archive/October2009/21/c8...
I have seen one ridiculous "RFP" that a government agency up here put out recently in which they wanted potential vendors to essentially do 6-8 months worth of work and if they landed the project, they'd end up with a long term multi-year contract. We're talking tens of millions of dollars here, but still, that one struck me as quite the lottery and I'm pretty sure the only companies that responded to it were the big names consultancy firms.
EDIT: here's the results of that RFP...whaddaya know look which firms won the bid: http://www.newswire.ca/en/releases/archive/October2009/21/c8...
It might be willful ignorance on my part, but I really want to believe that eHealth is the (unfortunate) exception, and not how IT usually works - even when we're talking about government contracts.
I've done some work for a Federal government agency a few years back and a provincial government within the past year. eHealth was exceptional not because of the cost but because nothing got done.
Here's where posting anonymously is beneficial (but alas since it's anonymous, take my account with a grain of salt). My opinion is that a select few large IT companies in Canada have a virtual monopoly on all government work. In fact, the only reason that I was involved in these projects was because certain teams from these companies screwed up so badly that some bureaucrats formed a skunk works side project to move things along. There was an unspoken understanding that the government wouldn't sue and shake the boat, but that they'd screwed up badly and needed to let another party try to resolve the situation.
Pretty much the only way you're going to get access to government contracts is via sub-contracting for these firms. To bring this post back on topic, the reason that this happens is because in a bid to try to account for government spending, the government issues these RFPs that are so lengthy and cumbersome to accomplish that only the big companies can actually pull them off. But it's a premature optimization and means that the government spends more money than it needs to. It's not unheard of for a simple web application to have a budget of CDN$1M. This would be something that your typical YCombinator team could pull off in 3 months and US$17K.
Some of the more successful government projects that I've heard of are ones where you have a bureaucrat that hires acquaintances without an active bidding process, because they can vouch for their expertise. Stuff gets done quickly and correctly the first time because there's little red tape to work around. Unfortunately, eHealth involved friends hiring friends and stuff just not getting done. I always thought that the criticism of eHealth folks hiring people they knew was less of a concern than the fact they simply didn't get stuff done. I mean think about it, in the private sector do you get people to actively bid on every little position and project or do you have your go-to guys?
Anyways, my opinion is otherwise largely positive with government work here in Canada. They seem to spend more money than I think they would if they let smaller more agile companies into the fold more often. But stuff seems to get done and when it doesn't (e.g., eHealth) you hear about it. Most of the government people I've worked alongside care very much about their job and doing it well. It wasn't unheard of for them to reply to my off-hours questions on their Blackberries on a weekend. So all is not lost. If I'm a little bitter, it has to do with what I perceive to be a rigged RFP process that favours these big vendors.
Here's where posting anonymously is beneficial (but alas since it's anonymous, take my account with a grain of salt). My opinion is that a select few large IT companies in Canada have a virtual monopoly on all government work. In fact, the only reason that I was involved in these projects was because certain teams from these companies screwed up so badly that some bureaucrats formed a skunk works side project to move things along. There was an unspoken understanding that the government wouldn't sue and shake the boat, but that they'd screwed up badly and needed to let another party try to resolve the situation.
Pretty much the only way you're going to get access to government contracts is via sub-contracting for these firms. To bring this post back on topic, the reason that this happens is because in a bid to try to account for government spending, the government issues these RFPs that are so lengthy and cumbersome to accomplish that only the big companies can actually pull them off. But it's a premature optimization and means that the government spends more money than it needs to. It's not unheard of for a simple web application to have a budget of CDN$1M. This would be something that your typical YCombinator team could pull off in 3 months and US$17K.
Some of the more successful government projects that I've heard of are ones where you have a bureaucrat that hires acquaintances without an active bidding process, because they can vouch for their expertise. Stuff gets done quickly and correctly the first time because there's little red tape to work around. Unfortunately, eHealth involved friends hiring friends and stuff just not getting done. I always thought that the criticism of eHealth folks hiring people they knew was less of a concern than the fact they simply didn't get stuff done. I mean think about it, in the private sector do you get people to actively bid on every little position and project or do you have your go-to guys?
Anyways, my opinion is otherwise largely positive with government work here in Canada. They seem to spend more money than I think they would if they let smaller more agile companies into the fold more often. But stuff seems to get done and when it doesn't (e.g., eHealth) you hear about it. Most of the government people I've worked alongside care very much about their job and doing it well. It wasn't unheard of for them to reply to my off-hours questions on their Blackberries on a weekend. So all is not lost. If I'm a little bitter, it has to do with what I perceive to be a rigged RFP process that favours these big vendors.
I used to work at a company that sold a software product to provincial/municipal governments in Canada, and the RFPs were often rigged. Sometimes in our favor, sometimes for a competitor. There were cases when the RFP was written in concert with our sales team to ensure we would 'win'. At other times it seemed genuine, but you can never be sure. Often the customer knows what they want, but they're required by law to go through the hoops.
This is a really well thought-out response. Even though people would probably like to describe eHealth as an exception, I think that situation really exemplifies the problems I was trying to expose in the RFP process. It's just another reason it's a bad system.
No, it exemplifies what's wrong in the GSA-style procurement system, where the process is deliberately complicated and biased towards a small number of institutionally-accepted contract holders. It has nothing at all to do with the bare concept of an RFP, and does not reflect the nature of RFPs outside of FedGov.
My uncle works full-time six-figures as a dedicated RFP response writer. It happens.
The article is well thought out and presents a good viewpoint. I think it's one-sided and, um, short-sighted.
I see the RFP process from the viewpoint of a buyer and a provider. From the buyer's standpoint, when we start a project we simply don't know what firms are capable of doing what we want done. The RFP gives us a level playing field to compare costs, capabilities, and experience.
Without an RFP, particularly for complex projects, you can spend months scoping out capbilities, refining your needs (both of which you should be doing AFTER you form a relationship.)
Which takes longer for a firm? Researching an RFP and presenting a document for a potential client's review or spending eight months going back and forth trying to figure out what to build. Of course, the latter. The difference is that providers get paid for those eight months (a plus for them) while buyers get nowhere.
I see the RFP process from the viewpoint of a buyer and a provider. From the buyer's standpoint, when we start a project we simply don't know what firms are capable of doing what we want done. The RFP gives us a level playing field to compare costs, capabilities, and experience.
Without an RFP, particularly for complex projects, you can spend months scoping out capbilities, refining your needs (both of which you should be doing AFTER you form a relationship.)
Which takes longer for a firm? Researching an RFP and presenting a document for a potential client's review or spending eight months going back and forth trying to figure out what to build. Of course, the latter. The difference is that providers get paid for those eight months (a plus for them) while buyers get nowhere.
Our approach is to respond to RFPs with a fixed-rate proposal development fee.
Anyone that's good enough to be in demand should do the same. Clients that expect you to do work for free will probably turn out to be difficult people to work with in the long term.
Anyone that's good enough to be in demand should do the same. Clients that expect you to do work for free will probably turn out to be difficult people to work with in the long term.
Do people tend to actually pay you to develop proposals? Or is that just your way of turning down RFPs?
I make this same observation every time the spec-work argument comes up (if you haven't picked up on it, I'm also not against spec-work):
When we were just getting started, lawyers from WSGR and another firm spent literally hours on the phone with us, for zero money and no promise of ever being compensated, presumably because the fact that they're willing to be that cool to work with costs them very little and makes them incredibly attractive in the long run.
I want to be like them.
I make this same observation every time the spec-work argument comes up (if you haven't picked up on it, I'm also not against spec-work):
When we were just getting started, lawyers from WSGR and another firm spent literally hours on the phone with us, for zero money and no promise of ever being compensated, presumably because the fact that they're willing to be that cool to work with costs them very little and makes them incredibly attractive in the long run.
I want to be like them.
Good point. So far about half have paid.
I guess the main reason this works for us is that we prefer smaller projects. We don't aspire to being a huge consulting company / agency taking on bigger and bigger projects. We like working on small projects that grow into bigger things.
I guess the main reason this works for us is that we prefer smaller projects. We don't aspire to being a huge consulting company / agency taking on bigger and bigger projects. We like working on small projects that grow into bigger things.
Just be aware that you're not only restricting the size of the projects you take on, but also the selection of clients you have to work with. Some very excellent projects will require competitive proposals for you to get in the door.
The normal way to solve this in government and big dumb companies (which issue RFPs) is to have one domain-specific expert firm awarded an RFP management contract, recusing itself from the actual implementation contract, which then specifies what will be in the RFP. Judging the proposals is a combination of the client and process-management contractor, and in some, the management contract manages the ongoing relationship with the contractor as well.
It's inefficient for best case (you have 2 contracts instead of one), but solves a lot of worst-case problems (bribery or incompetence leading to a rigged bidding process, companies awarding themselves contracts, or buying a perfect but wrong thing).
I'm not sure of the background of the author, but RFPs are standard in a lot of domains.
It's inefficient for best case (you have 2 contracts instead of one), but solves a lot of worst-case problems (bribery or incompetence leading to a rigged bidding process, companies awarding themselves contracts, or buying a perfect but wrong thing).
I'm not sure of the background of the author, but RFPs are standard in a lot of domains.
For the most part, I view the RFP as a way to encourage wrong and ill-fitting service providers or third party consultants to engage with your company or business. Simply put, an RFP is just a tick-a-box approach to seeking skills and services externally. The tick-a-box approach and mentality by it's nature sets up a very black and white context. This is the problem. Business for the most part is not purely objective.
A better approach I think, would to be more proactive and approach only those service providers or companies that are somewhat aligned with your business or company values and vision.
Another solution (for bigger companies) would be to fund smaller independent teams to consult as an acting external supplier.
A better approach I think, would to be more proactive and approach only those service providers or companies that are somewhat aligned with your business or company values and vision.
Another solution (for bigger companies) would be to fund smaller independent teams to consult as an acting external supplier.
Nice article, Max. Carl from nGen Works has an interesting post up of late on the same topic:
http://www.ngenworks.com/blog/detail/from_the_archives_chapt...
http://www.ngenworks.com/blog/detail/from_the_archives_chapt...
Mike Bosworth's two books Solution Selling and CustomerCentric Selling talk a bit about RFP/RFQ's.
The authors note that most RF[PQ]'s are prewired and biased towards a preferred vendor. The client gives out the RF[PQ] so the client can say it was properly competed for so it can pass the approval process in upper management. If you are not that preferred vendor who was there from day one, you will most likely not win.
The author cites one anecdote of a big company that has a separate department that only handles RF[PQ]s. One day they decided to take some metrics over a time period. Out of that time period, they submitted 153 bids to unsolicited RF[PQ]s ... only won 3.
The authors note that most RF[PQ]'s are prewired and biased towards a preferred vendor. The client gives out the RF[PQ] so the client can say it was properly competed for so it can pass the approval process in upper management. If you are not that preferred vendor who was there from day one, you will most likely not win.
The author cites one anecdote of a big company that has a separate department that only handles RF[PQ]s. One day they decided to take some metrics over a time period. Out of that time period, they submitted 153 bids to unsolicited RF[PQ]s ... only won 3.
Some RFPs are definitely rigged. Spotting them is part of being a good consultant. See upthread for a deeper discussion on this.
"Most" RFPs are not rigged.
A company that submits 153 RFP responses and wins only 3 has a problem, and it isn't with the concept of RFPs. Perhaps their pricing is wildly out of whack. For awhile, there were things we did wrong with our proposals that cost us several RFPs. We figured them out, resolved them, and systematically improved our win rate.
There is no way that 1.9% (or even 5%) of RFPs are bogus.
"Most" RFPs are not rigged.
A company that submits 153 RFP responses and wins only 3 has a problem, and it isn't with the concept of RFPs. Perhaps their pricing is wildly out of whack. For awhile, there were things we did wrong with our proposals that cost us several RFPs. We figured them out, resolved them, and systematically improved our win rate.
There is no way that 1.9% (or even 5%) of RFPs are bogus.
> "The client gives out the RF[PQ] so the client can say it was properly competed for so it can pass the approval process in upper management."
Indeed, we call this "column fodder," ;-)
Indeed, we call this "column fodder," ;-)
In case anyone's wondering, RFP (probably) stands for Request for Proposal
http://en.wikipedia.org/wiki/Request_for_proposal
http://en.wikipedia.org/wiki/Request_for_proposal
FWIW: An RFP is just a company's formal process for documenting an upcoming project and soliciting proposals from multiple vendors for it. There are as many RFP processes as there are companies running RFPs.
Hmm, this perspective seems to ignore growing services like InnoCentive and Aardvark to connect people with knowledge to buyers. I'm not sure about the pricing equilibriums in play, and I'm not sure about the relevance to RFPs. Am I relating two frameworks that shouldn't be?
hm. well, personally, I find 'relationships' in business usually raise costs. How to get around this? I don't know.
You could simply only buy commodities. If this is possible, it is clearly the best answer. However consulting isn't a commodity, and neither is design work. it seems that making it a commodity is a 'hard problem' - RFPs are one attempt to treat consulting as a commodity, and they are obviously imperfect.
You could simply only buy commodities. If this is possible, it is clearly the best answer. However consulting isn't a commodity, and neither is design work. it seems that making it a commodity is a 'hard problem' - RFPs are one attempt to treat consulting as a commodity, and they are obviously imperfect.
Here's the deal: it's called supply and demand. If clients have 10 quality firms to choose from, and they pay their firms enough, then building an excellent RFP is simply going to be the cost of doing business with them.
Sometimes, some firms are so good, and provide output that is so hard to match with any substitutable firm, that they get to set the terms for the client/vendor relationship. Those firms know who they are, because they have waitlists, and are already turning down clients.
If you want to boycott RFPs, by all means, get your lunch eaten by the companies who are willing to throw those two extra non-billable days at the task of making themselves extra easy to work with. But I don't think you're going to manage to demonize the RFP process the way designers have the spec-work process, because RFPs are simply the way consulting works.