The irony in reducing cost

I’ve never read a book about RFPs (requests for proposals), at least not that I remember, and I don’t think it would ever be worth it to read a book about RFPs. Judging by just about every RFP I’ve ever seen, most of the books must advise people to create excessive check lists of the things they want done. The books have to be written by people that have absolutely no ability to trust anyone and instead obsess over controlling every aspect of the work through the written word.

I’ve never seen an RFP explain why the proposed project would be worthwhile. At best there will be one or two obscure references to a problem. A problem that might be worthwhile, but likely isn’t. No discussion of why the problem is a problem. No discussion of what it would mean to employees, customers and the organization, to solve it.

Instead, the RFPs are chock full of legalese, checklists and demands for how the proposer must act. There’s no discussion of partnership, results, and alternative strategies. Pretty much every detail is set in stone. For goodness sake, you can take most RFPs, flip some pronouns, slap a price on, and hit the send button.

RFPs boil down to “How will you solve my problem, this way?” and “How much is it going to cost?” And let’s be honest, the price is what people are looking for. RFPs should be referred to as a Request For Price. Likely because, as I mentioned, nobody thinks about why solving the problem is worthwhile. Instead, they just want to find the cheapest way to solve it.

But when the only thing an RFP discusses, is a particular approach to solving the problem, with the threat that not solving it in the prescribed terms of the RFP is grounds for your proposal being revoked, how can one even consider alternative strategies? You simply can’t because you don’t have the framework to propose alternatives.

You don’t even have the framework to know if your proposal and price will be in, or out, of the ball park, without going through the entire process of proposing and coming up with a price. Of course, those books on RFPs must advise to make it explicit that the cost to construct a proposal is the burden of the proposer, because every RFP makes clear that it’s not a contract to supply a proposal.

Proposers have to go through the entire process of thinking through what it might take them. If the proposer’s cost is out of the ball park, or if the person producing the RFP thinks it’s outside of whatever ballpark they dreamed up, then it was all for none.

Keep in mind, an RFP means there are others coming up with proposals too. What a way for an organization to convey how much they value proposers!

And it gets better, the RFP is either 100 pages and overly specific to the point where there’s no way a proposer can understand everything involved. Or the RFP is about 10 pages of vague generalities. Proposers have to pad their estimates of what it may take. That’s certainly no way to reduce cost. Every line will be read between.

The irony, if it isn’t obvious, is that the RFP is a means to solicit the cheapest way to solve a problem. Aside from viability of success, the decision will come down to price. But the RFP encourages exaggerating the cost to make sure everything possible is covered. Because there’s no way to know what exactly will lead to success. Success would require a discussion about what makes solving the problem worthwhile. Proposers have to make leaps and bounds of assumptions about what may be necessary.

Imagine you go hunting and you spot a deer. You could have 30 blindfolded people form a circle and fire their guns in every direction. They might hit the deer. But you wouldn’t do this, instead you’d have one person aim directly at the deer.

Behind every RFP, hopefully, is a target. Without it, proposers must fire in every direction. That drives up cost.

If however, the target is well understood by everyone, then proposers can make suggestions based on the value of the target. Solving a problem for one organization might be worth a lot to that organization. That same problem may be worthless to solve for another organization. Solving it may actually cost an organization more than it produces.

If the proposer knows what it’s worth then the proposer can say:

You know what, we’ve done this before and it was really valuable and we put all the bells and whistles on. But, in this situation, it’s not worth so much, so we’ll scale back what we do. We’ll still find a way to help, we’ll just adjust our approach to make it worthwhile.

When this happens, the proposer can meaningfully help any organization by adjusting what they do to meet the value of the problem that was the impetus of the RFP.

But you aren’t going to find this happening in the form of an RFP, because an RFP is just a piece of paper. Understanding value is a diagnostic process that the proposer must lead and the customer must partake in. You can’t capture a diagnostic process with a one way communication. Sure, some RFPs have a process to submit questions and get responses, but it’s not in a format that’s conducive the intimacy of understanding why a problem is worth solving. Therefore, no RFP and Q&A process is going to be very successful at minimizing a cost, let alone maximizing the value of solving a problem.

If you find yourself proposing a response to an RFP, look for an opportunity to have a discussion about what makes the project worthwhile. And then see if there’s an opportunity to propose alternatives tailored to the value you uncover.

If you find yourself using RFPs to solicit proposals, focus on what makes solving the problem worthwhile, if anything you can use the RFP as a basis to document some basic information about what makes the project worthwhile. But stop there, don’t put any proposed solution into the RFP, that should be what the provider brings to the table.