Deciding Whether to Respond to an RFP

Your book discusses several factors that an organization should consider when deciding whether to respond to an RFP. Corbin Links offers additional guidance when deciding whether or not to bid on an RFP. The following list has been reproduced from Links (n.d.).

Should You, or Should you Not Respond to an RFP?

Requests for Proposal or “RFP” can be expensive and time consuming to create, much less respond to.
Often, there are many stakeholders involved, many different decision makers, and many barriers to payment.
 

The trick to being successful is finding out all the “insides” of the RFP.
Why was it really created? Who created it? What is the creator’s role in the organization? Does he or she have actual purchasing authority, or are they just a cog in a much larger wheel? Did a vendor create it for the requesting company? If so, did the vendor create it in such a way as to be overly favorable toward that vendor?
 

Calculate the true RFP winning chance, before deciding.
Let’s take government RFP bid responses as one example. A government agency may clearly state it is looking for a certain type of expertise, or composition of staff demographics, and pricing. And often, a certain weighting criterion will be assigned to each. But those criteria are for the “public”, and often required by law. In reality, an established vendor, doing the exact work specified in the RFP, for that exact agency and offering the lowest price STILL may not win the RFP award. Why? Hidden factors. (See above.) If you are stacked against 20 other competitors, you have to be realistic about your true chances of winning vs. effort in. Put honestly and bluntly—RFP responses can be like buying lottery tickets. Sure, maybe the RFP lottery has much better odds than the multimillion-dollar lotteries advertised on television, but it’s still a lottery. Or like betting on a horse race. The formula changes for each individual RFP, but here are a few things to consider:
 

• Time to be spent in response. (An RFP requiring a 20–50+ page response with graphs, citations, diagrams, etc. can take weeks for a responding company to prepare.)
• Opportunity costs of not pursuing other direct clients who have money in hand, while responding to the RFP.
• The perceived chance percentage your firm could be selected out of several—or even dozens—of other bidders.
• The payoff—if you win, will it all have been worth it? If so, how long will it take you to recoup your up-front investment? (Money, prestige, other new business, marketing collateral, etc.)
   

Calculate the RFP requestor’s award ratio.
There are many organizations, including governments, who may engage with you throughout the entire RFP process, only to later halt or stop the bidding process entirely. Or cancel the project after it is awarded. Try to find out how many RFPs are created vs. awarded by that organization, before bidding. (It’s not easy, but worth a little research.) For example, freelance bid services such as Elance include this statistic. It helps potential bidders understand if the requestor is a perennial tire kicker seeking only free information, or if he is a bona fide bidder with budget [sic]. We recommend responding only to organizations with a 75% or greater award ratio.
 

Avoid any RFP requiring a “shotgun” approach.
Let’s say you just found out about this great RFP. You just know you can do it. They [sic] payoff is huge. There’s only one catch—the deadline is 2–3 days away! Rushing the process can lead to mistakes and reduce the time spent on research. Research is SO vital to the decision process that I almost always recommend against shotgun RFPs. If you don’t have the time to do it right, just sit this one out. There will always be plenty more RFPs in the future. If you do decide to respond, consider engaging an RFP Specialist to help increase your winning percentage.
 

Have you bid—and won—on similar RFPs?
(Self explanatory [sic] . . . )
 

If you do decide to go for it, then go for it.
Submitting a winning RFP response takes time, effort, diligence and high quality [sic] work. Your response should literally scream “there is no other choice but us!” Need help with that?

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