May 04, 2018
For complicated procurements, the request for proposal or “RFP” process is a time proven tool for obtaining cost competitive quotes for services and products from qualified vendors. The mere use of the tool does not necessarily guarantee that a customer will derive the intended benefits from the tool, however. There are a number of best practices that customers should employ to maximize the benefit derived from RFP process.
The first necessary step is to involve a multidisciplinary team in the drafting of the RFP materials. The team, where applicable, should include technologists with the requisite technical expertise to understand the nature of the technology involved in the procurement, the customer’s business stakeholders who understand the business needs giving rise to the procurement, and legal resources capable of understanding the key legal issues and risk points in light of the applicable technical and business constraints.
Once assembled, the team should create descriptions, using objective terms, of the scope ofthe v endor’s undertaking, as well as any specific warranties or performance standards applicable to the vendor’s performance. The goal in drafting these descriptions is to achieve clarity and avoid ambiguity with respect to what the customer wants the vendor to do, and how well the customer wants the vendor to do it. Eventually, these descriptions will become important parts of the contract. Later sections of these materials will discuss specific techniques for achieving clarity and avoiding ambiguity with respect to the scope of work and performance standards.
The RFP materials should also include the key proposed legal and business terms for thecontemplated c ontractual relationship; this will aid in early identification of difficult negotiation points with vendors.
To the extent possible, the customer should identify multiple potential qualified andinter ested vendors and send the RFP materials to all of these vendors. First and foremost, involving multiple vendors increases the likelihood of getting a more competitive price. In addition, in many situations, the vendors may have questions about the RFP that may reveal unintended ambiguities in the RFP materials, or suggestions for changes in the products or services to be provided that may improve the results that the customer is able to achieve. The customer should catalogue and save all vendor communications, and the customer’s responses thereto, for at least two reasons. First, it may be advantageous to incorporate the substance of these exchanges into the ultimate contract documents to improve the procurement
or to remove potential ambiguities. Second, the exchanges may also serve as important “parol” evidence as to the parties’ intentions and understanding as to disputed issues in the event of litigation. (See, e.g., Bohler-Uddeholm America, Inc. v. Ellwood Group, Inc., 247 F.3d 79 (3d Cir. 2001) (holding that in the face of latent or patent ambiguities, extrinsic or “parol” evidence is admissible to allow a court to interpret of these ambiguities).
Finally, once the customer has selected a vendor and come to agreement on the overall set of terms governing the relationship, the customer should take care to ensure that all of the vendor’s representations and promises are physically incorporated, either literally or by reference, into the final contract document. This is because these representations and promises may be physically spread over numerous documents and media, and over time. In sum, while good use of the RFP process is no guarantee of a successful procurement, use of the RFP process, and the best practices described above, will improve a customer’s changes of a successful contractual relationship.