Friday, February 4, 2011

Suggestions for how to deal with RFP and ITB procurements issued by Government-Agency Procurement (Purchasing) Departments

(Disclaimer: I’ve not proofread this post. Please excuse the typos and spelling errors you find in this post.)

Here’s a link to the RFP document I’m later going to be referring to:

Very early this morning (in the wee-hours of the morning), I received an interesting e-mail from one of the officers of a reprographics company located in one of the Mid-Western states that’s now completely covered in a couple of feet of snow (if not more than that.) But, actually, he let me know that he was currently in Bonita Springs (near Naples), Florida, so he managed to avoid all that snow (at least until he has to fly home.) That e-mail prompted this post.

Okay, let me get directly to the subject of this particular post.

Some reprographers pursue business in the Government sector (Fed, State, County, City). But, some don’t. When I was active in the reprographics business, I was one of the reprographers that did pursue government-sector business. Although pursing business in the government-sector can be totally aggravating and frustrating (and I personally know that that statement is fact, not just opinion), government-sector customers a) pay their invoices, b) don’t go bankrupt, c) pay their bills on time, provided that you invoice them in strict accordance with their invoicing requirements, and d) offer reprographers the opportunity to generate sales and, yes, even profits. Whenever in the past I heard a reprographer say that he/she does not go after government-sector business because ….. “they don’t pay their bills and the work is never profitable, so why bother,” I always “rolled my eyes.” I absolutely loved it when my direct competitors ignored government-sector business!

To “properly” pursue government-sector business, one must be keenly aware of a variety of issues that bidders/proposers have to deal with. Understanding those “issues” ….. and how to deal with those issues ….. can either “make or break” your attempts to successfully reap benefits from your foray(s) into government-sector business.

Issue #1 – Fairness. Since the U.S. is a nation where “government is of the people, by the people and for the people,” government-sector procurement agencies are required to hold procurements that a) promote competition, and b) promote competition in such a manner where no one vendor has an advantage over another, in other words, create a “level playing field”, where all vendors have an “equal opportunity” to win business (subject, of course, to “affirmative action” initiatives, which, I think, should be done away with, simply because they allow firms to “scam” the system. But I’m not going to get into that issue in this post, because that issue is worthy of its own post.) Also, c), government-sector purchasing departments (and all of their personnel) are supposed to go about RFPs/bids in a completely “unbiased” manner. But, be aware that that does not always happen. When it does not happen, you have to, you must, speak up! There are two parts to “fairness”, a) fairness to all who choose to enter an RFP/bid competition, and b) fairness to the taxpayers!

Points related to Issue #1:

a) when you find a procurement that creates an advantage for one particular vendor, you must voice your concern to the agency holding the procurement. If you remain silent, that unfair advantage will not go away, and you will be at a disadvantage. Voicing your concern is your right! Some view voicing concerns as being politically incorrect. (“They may not like us if we criticize their bid/RFP document.” “They might ‘blackball’ us if we criticize their bid/RFP document or the bid/RFP process.”) And, while I do agree that “they might say that” if you voice your concerns, if you really want to do your job (as a citizen taxpayer in your community, you MUST be willing to speak up and voice your concerns. There are times when having a “third party” be your spokesperson is a good idea (doing that would allow you to remain anonymous.) E.G., years ago, there was a government-sector RFP procurement in our Tampa, FL market and, in the procurement document, they “basically’ spec’d the equipment requirements in such a manner that limited proposers to include only “Xerox” (brand) equipment. That, of course, gave an unfair advantage to Xerox Corp. We voiced our concern (we cried, “foul ball”), and they subsequently revised the “specs” to eliminate that unfair advantage.

b) Some bids/RFP’s are “evaluated” (for vendor-selection purposes) by “price” only, meaning that the awarded vendor will be the one vendor who proposed/bid the “lowest” price. But, as our government-sector found ways to waste our taxpayer dollars, more and more RFP’s, over the years, have been “structured” to be more “subjective” and less “objective.” When you find RFP’s that are structured in a more “subjective” manner, this basically makes “price” (which is a purely “objective” evaluation factor) of less importance. This enables a government-sector procurement agency to “select” a vendor who offers a higher price than the other vendors (sometimes, even the vendor with the highest price), and, in these cases, be very aware that cronyism and favoritism can render a procurement completely unfair to all proposers except for the one proposer who has “connections” inside (or, even retired from) the government agency that’s holding the RFP procurement. In the RFP document I’ve posted on Google Docs (related to this post), you will notice that “price” is only 25% of the “evaluation criteria”! For a procurement related to ‘planroom’ and ‘printing’ services, that is flat-out ridiculous. 60% of the valuation criteria is allocated to “subjective” criteria (“vendor capability to provide the services requested” and “vendor qualifications”). If I had a friend or relative inside the government (or retired from the government, but who maintained his/her connections within the government), I’d be very comfortable that “my” proposal would be “graded” the highest for those 60 points. Even though government-agency procurement personnel are “supposed to” evaluate subjective points (subjective evaluation criteria) “equally and with all due fairness to each and every proposer”, don’t, even for a minute, think that that’s always the case. And, if you’ve criticized the procurement (document or process) or simply made “suggestions” to improve the procurement, be aware that the points you earn for the (subjective) evaluation criteria will probably get hammered, even thought that’s not supposed to happen. Government-sector procurement departments and people do “take offense” to anything you say about their procurements! (The latter is often why using a “third party” is a good idea.) In any event, if I were a proposer for the RFP I posted on Google Docs, I’d cry “foul ball” about “price” being only 25% of the proposal evaluation. To do that, you must be capable of ranting about “the interest of taxpayers.” In the case of the City procurement I posed in Google Docs, I would have voiced my opinion (and backed it up with comments about the “interest of taxpayers”) that price should be 85% of the evaluation criteria.

Issue #2 – Knowledge and Transparency. Since in the U.S. (and because were are a true democracy) we have something called “Freedom of Information”. Because of that, all government agencies (whether Fed, State, County or City) are required to have laws, rules and regulations that obligate government agencies to be “transparent.” In Florida, laws, rules and regulations (referred to as the Florida Statutes) are put into place by our legislators and all administrators (of State, County and City government agencies) are required to adhere to the law. In Florida, we refer to these laws, rules and regulations that cover “transparency” as the “Florida Sunshine Law”. (meaning, “let light shine on all documents and matters in the public domain”.) Citizens have the right to request and the right to receive documents that are “in the public domain” and government agencies have the obligation to provide what’s requested. (That doesn’t mean that you can obtain documents for free. Most government agencies have pre-established prices for copies of documents.) (Also, not all government documents are covered by transparency law; for example, and these are just two of many exceptions, the government does not have to disclose government employee pay records and the government does not have to disclose documents that would imperil our safety.) But as to exceptions, I have yet to find any documents, related to a reprographics-industry RFP or Bid, where an exception applied. Meaning that, over the years, I’ve requested a TON of documents, and not once was any request not honored. You will note in the City RFP document I posted, that the RFP document mentions Indiana’s public disclosure law. It also says in the RFP that, if a proposer wants to, he/she can mark as “trade secrets” his/her response (proposal). Wait a minute. Instead of typing all this from scratch, I’ve placed, below, a few paragraphs from the RFP document:

The information supplied by a vendor as part of an RFP response will become the property of the City. Proposals will be available to interested parties in accordance with the Indiana Access to Public Records Act (IC 5-14-3). None of the proposal responses will be made available to the public until after negotiation and award of a contract or cancellation of the procurement.

To the extent requested by a vendor and allowed by law, the City will treat trade secrets and confidential financial information as confidential (if designated as confidential and submitted separately in a sealed envelope). The vendor must request confidential status before the proposals are opened.

If the City believes that information designated as confidential should not be treated as such, the vendor will be notified and afforded reasonable time to present objections prior to any release of the information. The City will take into consideration the possibility of harm resulting from any disclosure, but reserves the right to make the final determination in accordance with the law. (Note: Pricing information may not be considered confidential.)

Okay, now that you’ve read that, consider this. During an RFP proposal process I was involved in years ago, one of the proposers marked its entire proposal “secret, not subject to disclosure.” We successfully defeated that request. We were only able to “defeat” that request because we had read the law (the entire law) and because, knowing what “the law” said, were able to make the points necessary to defeat the proposer’s claim (that its proposal should be considered “trade secret.”) It takes some time to go about this, but it is definitely worth it (well, that’s just my opinion, of course.) After all, we aren’t talking about nuclear-bomb secrets, are we? I am “so anal” on this particular point that I would, if I had to, hire an attorney to force disclosure.

Points related to Issue #2:

Now, I’m going to do my best to explain to you what you should consider doing if you really want to be successful in competing for government-sector business.

a) Read the entire RFP or bid document, over and over, until you are absolutely sure what you have to do to be considered a “responsive” proposer/bidder. Do you really want to be considered “non-responsive” because you did not fulfill every requirement to be considered “responsive”? If you have questions about the RFP or bid document (about anything in the document), then prepare your questions in writing and send them to the procuring agency. (The only dumb question is the one that is not asked!) Later, when you get the response, if you get a response you don’t understand, ask for clarification! Government procurement people are sometimes lazy and sometimes stupid, to the point where they issue responses that even the most veteran reprographer can’t understand!

b) Do your best to educate the procuring agency about reprographics and about the terms we use for our services and the units of measure commonly used by reprographers. Do your best to convince the procuring agency to update and modernize their procurement document so as to eliminate services that are completely obsolete. (When they don’t listen to you and/or don’t do what you suggest, learn how to take advantage of their ignorance.)

c) If the procurement is one that’s replacing an earlier procurement (meaning that the current procurement represents competition for a contract that is soon to be over and done with), then request one year’s worth of paid invoices. I’m talking about the invoices that the “current vendor” submitted to the government agency for work that was done during the most recent twelve month period. Government agency procurement people are particularly lazy when it comes to publishing “real” past demand (the actual quantities that were ordered from, and provided by, the current vendor) for the services listed in an RFP or Bid document. Don’t ever rely on “estimated” quantities listed in an RFP or Bid document! Rarely are they accurate …. or even close.

d) Make sure that your proposal or bid is delivered before the deadline (we most always hand-delivered our proposals and bids, so that we could watch the receiving person “date and time stamp” our envelope. That way, no funny business, such as later being told, “your bid/proposal was late,” or, “sorry, we didn’t receive your bid/proposal.”)

e) If the procuring agency is holding an “open bid” session, meaning that they will, at a designated time and place be “opening” the envelopes and reading out who bid and what was bid, then, by all means, have someone from your company attend the bid opening session! Most government agencies, simply as a matter of standard procedure, will hold “open bid” sessions, and, if you attend the session, they will, if asked, read out the bids. Or, allow you to examine the bids that were submitted. (This is not always the case for “proposals” responding to RFP’s.) As to “bids”, there were times when I had to ask that the gov’t person opening the bids read out the prices that were bid (by each bidder) or where I had to ask for copies of the bids so that I could record the bid-prices on a sheet of paper I always brought to bid openings. Whenever the information wasn’t voluntarily offered, I spoke up and asked for it. They can’t deny you! So, if the information is not offered, then ASK FOR IT! In fact, DEMAND IT. The best way to prevent funny business with bids, is to record the bids when they are opened. Then, no one, later on, can slip a new bid into the pile of bids. (You never know who’s got a friend inside a government procuring agency.) As I said, RFP’s are different, so you have to refer to the instructions to proposers to find out when you can get copies of proposers’ proposals.

f) Always request, at the earliest time they are supposed to be available, copies of every bid and every proposal submitted! (and submit your requests in writing, not over the phone.) You can learn a lot from reading and reviewing bids and proposals submitted by competitors. Never, ever let any government procurement agency get away with not complying for your request for copies of bids or proposals. Remember, you have the right to request and receive copies of those documents, and they have the absolute obligation to comply with your request!

g) When the procurement is an RFP and is evaluated by subjective criteria, that means that someone (or several people) at the government procuring agency is going to read, review and ‘score’ the proposals. You have the right to request and receive the minutes of proposal-review meetings and the right to request and receive any recorded-tapes from those meetings (if recordings were made, and, nowadays, most government procuring agencies do make recordings.)

h) Also, if the proposal review/scoring meetings are going to be held in “public” session, then attend those meetings and listen in. You will be surprised at how absurdly stupid some of those meetings are. You will learn, first-hand, how the “points” for “subjective” criteria are awarded.

i) Maintain a history file of government-sector bids and proposals. That history file can make a difference.

Issue #3 – Evaluation of “Price”. I don’t mean to shock you, but there have been (and will continue to be) bid documents and proposal documents that contain sheets where bidders/proposers are required to enter their “prices”, but nothing said about how the “low price” bidder/proposer will be determined. In most bids/proposals that call for pricing, the procuring agency will list the services, will indicate the standard unit of measure for each service (pay particular attention to that), and will provide an “estimated” quantity for each service. They will also require you to enter your unit prices and to extend each line item (total for each line item) and to enter a “total bid” (for all items) at the bottom of the list of services. That’s the simple way of “evaluating” who is the “lowest” bidder/proposal. Now, if you look at the “pricing page” that’s in the City RFP document that I posted on Google Docs, you will see that this City agency has not explained how the “low price” proposer will be determined. There are 8 items listed. “What if” there were 8 proposals submitted and each proposer entered the lowest price for one service? Meaning that 8 different proposers would be the lowest-price proposer for a different service. How the hell does that compute to the “lowest overall price proposal?” It does not compute! That would have been the first question I asked this City agency, right after I first read the RFP. When it is unclear, in any way shape or form, “how” the agency is going to calculate the “lowest price” proposer, then you MUST ask that question, and do that as soon as you can. Don’t allow “price” to be come a “subjective” evaluation criteria.

Other Issues:

Earlier, I mentioned the issue of “politically correctness.” If you are worried that your communications with a government agency will hurt you, then you may want to consider asking your questions or making your suggestions and comments (including criticisms) through a “third party.” Could be a cousin, a friend, a consultant, an accountant or an attorney, someone who won’t be (can’t be) directly connected to you or your company.

If you believe that any competitor is benefitting from favoritism and/or cronyism with respect to bids/proposals and/or “projects” in the government sector – and, folks, that is NOT supposed to happen in government-sector procurement - then you may want to seriously consider speaking to someone in the local state legislature, to voice your concerns and to ask for guidance how to deal with it. You may also want to consider speaking to an investigative reporter (for a local newspaper, alternative newspaper, local TV station, local radio station). Investigative reporters love to find and report on stuff that government agencies (or politicians) are doing but not supposed to be doing. C’mon folks, this is America. If you have not yet read any of Upton Sinclair’s books (one of the most famous “muckrakers” in U.S. history), read a few; they are enlightening; they will encourage you to participate in the process of keeping our government-sector “honest.”

Doing business in the government-sector can be very profitable over the long haul, but, like it or not, it can also be very frustrating. Learning to take advantage of bids and proposals can be a lot of fun and be very rewarding, but it takes a lot of work to position oneself to really know how to take advantage of bids and proposals.

Above, I mentioned that it is always a good idea to request copies of all bids and proposals that were submitted in a competition in which you participated. But, you shouldn’t limit your interest to only competitions you entered. If your company is thinking about offering a new business segment that your company has not offered in the past, such as the FM business (if you are not already in that business), you might find it very interesting to request and review copies of proposals that were previously submitted in government sector FM Service RFP competitions held in the past. And, not just ones that were submitted to government agencies in your market area. Last year, Pitney-Bowes (PB’s FM business segment) was awarded two different government-agency staffed (reprographics-services-related) FM deals. Although I haven’t read the proposals that PB and others submitted in those competitions, I’m sure that anyone who read/reviewed those proposals would learn something about the FM business and how to propose FM’s.

I invite Repro 101 blog visitors to comment on this article. And, to use the “comment” section to share their advice.

I may or may not update this particular post.

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