This story originally appeared in the June 2016 issue of E-Scrap News.
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For most e-scrap operators, a notification for a request for proposal (RFP) is greeted with a sense of excitement – and dread. While the new business opportunity is enticing, the prospect of responding also means countless hours of research and preparation, all with no guarantee the work will actually produce a new contract.
After more than 17 years of responding to RFPs at Cascade Asset Management and learning about best practices used in other industries, I’ve gathered a few techniques that have helped our company optimize the process to respond to RFPs and put us in position to win more bids.
First of all, we organized our past responses into a database that allows us to pinpoint strategies and replicate verbiage that has aided us in past bidding processes. Second, we developed a toolkit that we make available to entities that are looking to put together their own RFPs, but may not know exactly what needs to be covered in the document.
All of this effort and organization has led to some helpful insights when it comes to the RFP process, and discussion of these concepts may help lift other companies and the electronics recycling industry as a whole.
Not all requests created equal
Before getting into those lessons learned, it’s helpful to know what we’re talking about when it comes to RFPs. In part because the e-scrap industry is very young and still evolving, there is no standardized manner in which corporations and government agencies issue requests for electronics recycling and IT asset disposition (ITAD) services.
Requests often come in different forms and with a variety of names such as RFPs, RFQs (quotes), RFBs (bids) or RFIs (information).
Generally, an RFI is issued when an organization is interested in a preliminary evaluation of potential suppliers to provide desired services. There is typically no request for specific pricing during the RFI process. Rather, solicitors are asking for qualification information and a simple means to assess whether they want to further engage potential suppliers in the evaluation process. When responding to RFIs, it’s wise to share just enough information to ensure a firm is considered in subsequent solicitations. Bidders can use this stage as an opportunity to build a relationship with the potential customer.
On the other end of the spectrum are the RFQ and RFB processes. During these solicitation events, buyers have stated the specific services and supplier requirements requested and ask for individual pricing information. There’s much less of an opportunity to be creative in these responses because the organization has relegated the requested list of services to a commodity bidding war. It’s also difficult to propose mutually beneficial, engaging solutions that create additional long-term benefits for the buyer and profitable growth for the supplier. At Cascade, we generally stay away from RFQ/RFB solicitations unless they are aligned perfectly to our strengths.
An RFP, on the other hand, is a purposeful solicitation that generally invites potential suppliers to identify value-generating services and solutions that should provide mutual benefit to the customer and the vendor – that is, if the RFP scope is set up properly.
The challenge is that the procurement specialists putting together RFPs for electronics recovery often do not possess the expertise to know what to ask for. That’s where our industry can offer assistance.
Building an RFP knowledge base
Once our firm started responding to a number of RFPs, we quickly discovered we were building a significant body of work based on our research and final written submissions. Seeing an opportunity for efficiency, we organized past responses into a simple database, which we could easily access and search to help us reply to future RFPs. The system also allowed us to identify well-written and organized RFPs that resulted in better outcomes for the client and winning bidder.
This database served as a learning tool for our sales team. We can review answers and collaborate to support future responses. We have also leveraged the different writing and presentation styles that have emerged during past projects to help create more effective future responses.
Once our past work was organized, we began a more systematic process to evaluate the outcomes of our proposals. After an RFP decision was made, regardless of whether we win the contract, we ask the prospective customer how our submission compared to those of other suppliers. If we win, we want to know what made our proposal stand out. If we lose, it’s helpful to know what, if anything, we could we have done differently.
Oftentimes the organization issuing the RFP tells us they cannot disclose the evaluation criteria or why one vendor was chosen. But in other situations, we’ve learned a great deal from follow-up discussions. We just needed to ask.
When we respond to a government RFP, we often will request to see a copy of all the supplier responses (usually after a decision has been made but before appeal opportunities are exhausted). Government contracting review processes are generally publicly accessible. This stage presents a golden opportunity to see how competitors set up pricing, position services and generally approach business opportunities. Such information is very difficult to discover otherwise, since there is little published about market pricing and how private companies in our space operate.
In addition, in the IT services space, it is a regular practice to not only review competitors’ RFP responses on governmental bids but to also challenge the responses and potentially appeal a procurement decision if a bidder believes a competitor did not properly answer each response requirement.
Gathering market intelligence from RFP events has shown us that sometimes we get passed over due to our specific capabilities, geographic footprint or experience. Other times, we lose a bid because we haven’t presented ourselves as well as others. This is all good information to help us better target RFPs and craft our response to those RFPs that seem like a good fit for our company.
Making it easy for organizations to issue good RFPs
As we reviewed all of these RFPs and our responses, we also discovered that many organizations seeking services simply did not know what to ask when evaluating suppliers. An FYI on RFPs
We decided to help them by leveraging our RFP response database and institutional knowledge to create an “RFP Development Toolkit,” which was written as a comprehensive template that businesses and organizations could use to request ITAD services. It includes all the essential elements of an RFP and invites the organization to consider a number of ITAD-specific points in their supplier evaluation process. Since an RFP is generally a fairly complicated document involving a number of stakeholders, assembling this Toolkit proved to be an invaluable time-saver for procurement officials tasked with putting together RFPs for their organization.
Why did we spend time putting together a document for other companies and groups? First and foremost, the resource can serve as a valuable first step in relationship-building and puts us in prime position to win a contract once the RFP is released. When our business development team learns that an organization is considering options for new ITAD services, the team informs the organization about this Toolkit to aid in the review effort. Organizations know how much time it takes to put an RPF together, so they are grateful for the use of the tool.
We also publish a limited version of the Toolkit on our website. Just Google “Sample ITAD Tools” and we are often one of the first websites to appear. This public version of the Toolkit includes a description of all the elements of the RFP in a non-editable format. If people want to download the full version with all embedded and editable attachments, they need to register with us and provide contact information – which helps us know who is likely to be issuing an RFP in the near future and we can start conversations with them right away.
The RFP Toolkit guides organizations through crafting an RFP and recommends they include the following essentials:
Company/institution background. In this section, the RFP identifies the size, strengths, and interests of the company leading the RFP and its experience with ITAD services.
RFP scope. This is a list of the equipment, locations and service requests included in the solicitation. It’s important to get specific information about the organization’s IT infrastructure and ITAD service needs.
Objective and vendor requirements. Here, the RFP notes the expectations and qualification requirements of respondents. This is where we start planting seeds to help solicitors know what questions to ask. This section lists an alphabet soup of privacy protection regulations and certifications that vendors may need to comply with. We encourage organizations to involve their risk management departments to review the list of regulations before completing the RFP. When we involve more stakeholders in the RFP development process, we ensure the procurement department carefully considers its security, environmental and service interests as opposed to just price.
Timeline. The document should offer a list of dates specifying when responses and actions are due.
Evaluation criteria. This area clearly describes how the RFP will be scored. We ask the organization to enumerate the criteria they will use to evaluate proposals. Knowing how much weight they put on each element helps potential bidders know which opportunities play to their strengths.
General instructions and disclaimers. We put together the best legal language we saw from a number of RFPs into this Toolkit to satisfy the lawyers.
Narrative response. This is essentially a list of questions for respondents. The heart of the RFP, here the organization seeks information about the qualifications and capabilities of the respondents and their proposal for services. The Toolkit provides a list of the best questions we’ve seen from our database of past RFPs, especially those questions that play to our strengths. For those organizations that don’t even know where to start when asking for services, this is an invaluable collection of touchpoints.
Pricing template. This section is a spreadsheet to input line item pricing. When we started responding to RFPs, pricing templates were all over the map, and we struggled to correlate our service menu to the unique price sheets in each RFP. While we don’t list our per unit pricing in the Toolkit, we do identify our available services and the unit of measurement for pricing each service (a good way to move people away from asking for per-pound pricing and toward asset-level pricing). Now we are seeing many more people using our pricing template, making it much easier to respond to requests and ultimately service them when they come on board.
Agreement template. Organizations will generally ask respondents to indicate whether they will accept the terms of their supplier agreements. The trouble is that they may use a standard service agreement that doesn’t fit with what we do. So we make things easy for them and us by including Cascade’s master service agreement template.
Lifting the greater industry
When we respond to an RFP built around our Toolkit (with the organization modifying it to fit their needs), our success rate grows substantially and the process is much more enjoyable.
But regardless of whether our company wins the contract, the organization issuing the RFP is better off – and so is our industry as a whole.
An ancillary benefit of this document is that it helps educate the market about how to ask for ITAD services that truly benefit their IT programs and discourage a race to the bottom seeking nothing but the lowest cost option. If we get more tools like this out to procurement officials, we put well-qualified e-scrap and ITAD firms in a position to expand their services.
Such situations mean more business for hard-working operators and more peace of mind for the companies and groups relying on our industry for proper management of material.
Neil Peters-Michaud is CEO and co-founder of Wisconsin-based Cascade Asset Management. He can be contacted at [email protected]
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