Three black devil icons on a red background for Necessary Evil blog post

Necessary Evil

May 23, 2023

Last week a friend was groaning about her company’s search for a strategic consultant, “We realized mid-stream that the project scope isn’t properly defined, but we can’t abandon the request for proposal now. It’s just a necessary evil.”

Requests for Proposals (RFPs) have been used to solicit bids and purchase services for more than a century. The process is supposed to be transparent and fair – a systematic way to compare firms and how they will solve your problem.

If you’re buying a three-year supply of pencils, this makes a lot of sense. Who can deliver the best quality at the best price? Pencils are a commodity. Knowledge, experience, and insight are not.

Are RFPs *really* necessary?

There are several reasons companies rely on RFPs to make purchasing decisions, but how valid are they? Let’s take a look:

  • RFPs are intended to ensure fair competition among firms, allowing companies to evaluate multiple options and select the best fit for their needs.

It makes sense to think that issuing an open invitation should encourage a more diverse field of responses. However, RFPs often rely on generic templates which force firms to focus more on compliance than communicating expertise or an ability to provide insightful and unexpected solutions. Standardized responses limit every firm’s opportunity to showcase unique capabilities, cultural fit, and ability to create value.

  • They provide a structured framework for gathering information and evaluating responses.

Structure can be useful – a company doesn’t want to reinvent the wheel for every purchase – but RFPs are time-consuming and costly for both the vendor and the client. With professional services, no two projects are alike.

If five firms each spend 50 hours preparing a proposal, that’s the time equivalent of about $50,000. If three staff members combine to spend a similar amount of time evaluating the proposals, that means $100,000 has been invested before even beginning. I sure hope the project is worth well north of $100K, or everyone is losing money.

  • They act as a shield against bias in the selection process.

This reason is likely a favorite of the legal department. Everyone has biases, and it’s good to both acknowledge and try to minimize them. But what happens when three competing firms all appear to be well-qualified with similar experience and cost? Subjective factors necessarily come into play, and the firms in question have no way to respond to them.

And this doesn’t even account for situations when a preferred vendor or incumbent affects the buying process, making the exercise more of a formality than a competition.

Are RFPs *really* evil?

As they say, the devil is in the details. From a proposal writer’s point of view, the following red flags will negatively affect the quality and quantity of proposals submitted.

  • The scope of work is poorly thought out.

Worst case, this signals inexperience or an effort to collect free ideas. When a project is large and complex, it’s almost impossible to know all the ways it could evolve. Consider hiring someone to help refine the project scope before sending out the RFP. As they say, a problem well defined, is a problem half solved.

  • There is no effort made to identify firms that might be a good fit.

A little homework goes a long way in identifying and inviting firms that have the experience and skills needed to successfully solve your problem. Building and maintaining an active and diverse network of colleagues is extremely helpful when you are seeking expertise.

  • Refusal to have conversations before proposals are submitted.

You’re about to begin a significant, consultative relationship. The open exchange of information shows respect for the time and insights of a prospective partner, and acknowledges that the project scope is a work in progress. Email is okay, but a conversation – by phone or in person – is a better way to provide context and build a relationship.

  • The budget is withheld.

By the time an RFP is sent, there is either an approved budget or you’re not really serious about completing the work. A hesitance to discuss money indicates you consider responding firms adversaries who can’t be trusted to provide an honest evaluation of a project’s value. Get the most bang for your buck – the best expertise and outcomes – by revealing the budget up front.

How will I hire someone without an RFP?

There’s always a better way. Here are a few alternatives to consider:

  • Request for Information (RFI)

Sometimes called a Request for Qualifications (RFQ) – RFIs can be a good way to learn more about the capabilities of different firms. It’s less formal and far less time-consuming than a traditional RFP, and can help you identify which candidates may be the best fit for your project.

  • In-Depth Interviews

Once the field is narrowed to a few finalists, you can have more substantive conversations that explore project parameters, opportunities, and challenges. The more you ask at this stage, the more ethical it is to pay all firms for their time. You will get a much better feel for how the relationship will work, and be leaps and bounds ahead of where you would be from simply reading a generic proposal.

  • Work in Stages

With complex projects, instead of including both strategic and tactical work in the same RFP, separate the two. Defining and refining the project scope – What is the current state? What is the desired future state? – takes different skills and experience. It will save you time and money when it’s time to complete the work.

  • Direct Negotiation

In some cases, it may be appropriate to negotiate directly with a service provider without going through a formal proposal process. This is a good option if the company has a successful relationship with a firm, the project is relatively small, or requires unique experience and skills.

RFPs aren’t necessary

RFPs are inefficient, impersonal, and seldom lead to the conversations that build trust, reveal insights, and produce more successful outcomes. They are the fig leaf that covers up an organization’s reluctance to do things differently.

Customized solutions benefit from customized responses. Isn’t it time to ditch the RFP and embrace a better way to hire consultants?

When it’s time to bring in help, how do you find the right helper?

Dan Woychick is a problem solver, creative collaborator, and owner of Woychick Design. He helps purpose-driven organizations raise awareness, inspire donors, and move people to action. Connect here: Instagram | LinkedIn | Twitter

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