Sign & Digital Graphics

March '18

Issue link:

Contents of this Issue


Page 32 of 234

28 • March 2018 • S I G N & D I G I T A L G R A P H I C S RUNNING THE BUSINESS learning points from that seminar still apply today. The seminar leader opened with the point that the county is not obligated to take the lowest quote on any RFP bid. She went on to explain that a competi- tive bidder must first be determined to be responsive, then qualified, before any quoted price was given consideration. A "responsive" bid is one that is received on time, in the prescribed for- mat, and is completed in full from a bid- der that is on the agency's preferred ven- dor list. Just to be invited to bid means a potential supplier submitted an applica- tion to be added to the preferred vendor list. But being on the list does not guar- antee the agency or company will buy from that vendor. It simply establishes that the buyer recognizes the vendor as a viable supplier and will send RFPs to them, when appropriate. If an RFP is published and distrib- uted, and the preferred vendor is "non- responsive" to the bid, the supplier's name may be removed from the list and thus be ineligible to participate in any future bids. If your company ever receives an RFP—either from an organization that you know or from an unsolicited one— and you fail to respond to the bid with a "no-bid" letter, don't be surprised if you are never asked again by that potential buyer to submit a quote for contract work. Of course, that may be your conscious choice as well. Interestingly, almost one-third of companies in the United States have a formal policy never to do business with a governmental agency because of their record of being slow payers and difficult customers. If you inadvertently forget to com- plete a section of the RFP, the entire bid may be disregarded and determined to be "non-responsive." So, for example, if the bid specifications call for a price on a par- ticular type of sign installation, and you do not have the capability to adhere to the specs, one should enter a "no-bid" in that section rather than leaving it blank. Continuing with the notion that you don't have the capability to fulfill all of the bid specifications, and you enter a "no-bid" response, while your company can't be accused of being non-responsive, it may be considered "unqualified" and cause your entire bid to be set aside. A "qualified" bidder is one that has demonstrated an ability to fulfill all aspects of the bid specifications that the decision makers deem vital. Therein lies considerable subjective interpretation. The buyer has a great deal of latitude to determine if a bidder is qualified or not. Therefore, if an organization really doesn't want a particular vendor to win the bid, it will likely find some aspect that does not meet the minimum standards set by the decision makers. That may not seem very fair, but rec- ognize that some companies and most government agencies wouldn't be going out for bids if they didn't have to. It is generally not the preferred manner of choice to award a piece of business. Instead, it is usually mandated by law or required by a higher authority, such as a board of directors. It is an unwrit- ten yet widely accepted fact that, in well over half of all RFPs, the successful bidder has already been decided even before the bid is made public. Once a select number of bidders have been deemed responsive and qualified, then the lowest bidder among those com- petitors is typically awarded the contract. Here, it is important that your company not over-propose the bid. Only submit proposals that meet the bid specification precisely. Don't add features and benefits to a proposal that aren't required by the bid specs. There will be time after you are awarded the bid to convince the buyer that your company's exclu- sive features will enhance their satis- faction. They shouldn't expect those special added features to come with the quoted price unless you included them in the proposal. Remember, they didn't think those enhancements were important enough to include in the original RFP. If you include them because you believe it sets you apart from your competition, be prepared to provide them for free. Reserve your bid-winning efforts to only those opportunities that are lucra- tive or have long-term cash-flow poten- tial. Understand that you will likely forgo some gross-margin points to land a big contract, but if that lower gross margin is still acceptable and it keeps your equip- ment running and people busy despite seasonal peaks and valleys, then pursu- ing RFP/bid contracts can be a rewarding initiative. Final Thoughts Here are some quick tips you may want to employ in your bidding practices: • Assist in the writing of bid specifica- tions whenever possible. You will need to focus on the customer-supplier rela- tionship and establish yourself and your company as being likeable, trustworthy, and a pleasure to work with in order to be given the chance to help them write the RFP. • If you currently are the incumbent in a contract that was won on a bid, ask if the ending date and terms of the contract can be extended without going out for bid so soon or as frequently. Multi-year agreements are preferred, provided there are price increases scheduled throughout various periods of the contract or based on well-publicized and accepted indices, such as the Consumer Price Index. • If you decide to try and win a bid on a very low price, be prepared to be held accountable to and perform every aspect of your proposal—regardless of the adverse effect on your company's profitability. Better yet, persuade your prospect to set the expectations for qual- ity, service and delivery very high, then be the lowest—or sometimes, only—bidder that can deliver the goods. Good luck and happy bidding! SDG In well over half of all RFPs, the successful bidder has already been decided even before the bid is made public.

Articles in this issue

view archives of Sign & Digital Graphics - March '18