Does this sound familiar?
Several years ago, a VP for a large facility services firm noted an increase in Requests for Proposal (RFPs). Normally lots of RFPs are a good thing. However, these RFPs aren’t what they seem.
He felt many customers were only going through the motions. That they were not honestly considering contractors’ responses. He calls these bids “hollow RFPs”, and says customers aren’t listening.
His logic goes like this:
- The corporate corruption meltdown that began with Enron, WorldCom & Adelphia – led to ->
- Increased corporate governance (Sarbanes-Oxley) -which led to ->
- Customers testing contracts against the market -which led to ->
- More RFPs more often
He says the problem occurs when customers aren’t truly testing the market, they aren’t seriously working the RFP process.
Here are his clues for spotting hollow RFPs:
- No pre-qualification – any & all contractors can bid (lots do)
- No presentation – just drop off the bid doc
- No site tours
- Short turnaround times when many sites are involved
- Basic qualification questions only, nothing specific about working the site
- Poorly written RFPs; outdated, incomplete, disorganized, misspelled
You’d think contractors would respectfully decline to participate in hollow bids. But many feel they’re in a bind. If they decline to bid they’re concerned the customer will exclude them from future bids, maybe even pull existing contracts from them.
So, if customers use hollow RFPs to fulfill their SOX obligations:
- Are customers concerned with additional costs of hollow RFPs?
- Do contractors have a chance to impress customers in a hollow RFP?
- If contractors pass on hollow RFPs, do contractors exclude them from future RFPs?
Of course, incumbent contractors love hollow RFPs. They’re golden.