Responding to Proposals and Bids: A Step-by-Step Process

A request for proposal (RFP) is an inquiry made to potential suppliers to submit a proposal, often through a formal bidding process, by an organisation interested in procuring a service. RFPs are usually submitted before formal procurement and the process allows the risks and benefits to be identified clearly. The RFP presents preliminary requirements for the service and will expect a particular structure and format. Similar, less formal requests include a request for a quotation and a request for information.

 The Bid Management Process

Figure 11.1 The Bid Management Process

This section describes a step-by-step process for preparing an effective bid. Figure 11.1 shows an outline of the process using the funnel analogy.

Bid or no bid?

Right at the outset, it is important to decide whether this proposal/bid is worth the likely preparatory effort. So it pays to check early on if the opportunity has a strategic fit with your firm's goals. Will the success in this bid move your firm closer to its strategic goals by focus sectors/geographical locations/ type of work sought? Many organisations are interlinked with others.

Your firm may already be engaged by such an organisation, so it pays to check if there is any conflict of interest with other engagements, for example, working with a competing organisation. It is also important to have a minimum level for responding to bids. As an example, a firm may decide that for its central bid team to respond, a bid has to be worth at least £100,000; a regional bid may have a value of at least £50,000 and so on.

It makes sense to consider what your chances are of winning. Has your firm any history of bid success/failure with this Client? All proposals/bids take time and resources to prepare. If you prepare a bid, will the estimated cost to bid outweigh the fee/profitability benefit to your firm? Many large organisations submit requests to existing and other suppliers, even if you are already engaged for some work. It pays to consider how this bid might impact your relationship with the Client. A bid evaluation process is described later in this chapter. After consideration, you may decide to decline this opportunity; it could be that the Client is not of a size that is appropriate for your firm to serve. There could also be a conflict of interest.

Background research on the client

It is important to show your Clients that you understand their business and current/likely issues to be faced in their operating arena. Ensure that your team collect relevant information about the potential Client. For example, what press coverage have they had recently? What issues does this reveal for this Client? What revenue and profitability data is available?

It is clearly very useful if you are able to meet with the Client to scope their requirements in advance of submitting a formal response. This will enable an understanding of why the request has been sent, who is involved in making decisions and so on.

Sources of your credentials

• Referrals from similar Clients (i.e. size, sector).

• Awards relevant to the situation.

• Current Clients.

• Reference case studies.

• Sector-specific credentials.

• Service line-specific credentials.

• Published articles.

Value to your firm

Estimate the likely projected fee income worth over time, e.g., £50,000 a year over next five years. There may be potential for recurring business. Having a well-known Client may enhance your reputation.

Selecting your bidteam

It is vital for a successful response to choose the right people, with the right credentials, who are available and are likely to get on well with the Client and operate within their culture. It is a bonus if the team selected have worked well together on other similar assignments. Ensure that the team size is appropriate to the Client's requirements. Involve external specialists if relevant. Depending on the bid's scope, a bid team typically consists of the following people and roles:

Bid manager - to manage the project, co-ordinate the stakeholders and assess overall value to the firm.

Client manager - to discuss the strength of relationship and DMU analysis.

Technical experts - to assess the required capabilities to service the Client.

Legal expert - to assess risk.

BD - potential sales opportunities across the firm.

Relationship/other partners - to assess whether there are any reputational issues/conflicts with the potential Client.

External specialist - if required to increase the chance of bid success.

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