Instead of opening your RFP to just anyone, make sure you build in a qualifying round so that only viable potential bidders make it to your big dance.
Can you imagine if the NCAA opened up the national basketball playoffs to every team? There would be no reason for the regular season. March Madness would be a year-round tournament.
Which is exactly why the NCAA invites just 64 teams to the “Big Dance.” Only the most qualified teams get to play for the national championship. The tournaments – men’s and women’s – run like clockwork, in a defined time period, with teams proving themselves in each bracket until one is victorious.
Companies putting out requests for proposals – RFPs – should borrow this page from the NCAA’s playbook. Instead of opening your RFP to just anyone, make sure you build in a qualifying round so that only viable potential bidders make it to your big dance.
You might wonder why you shouldn’t open your RFP up to all interested companies. Here’s something to consider. There are thousands of single location recycled pallet companies plus about 15 regional, multi-regional and national pallet companies. Invite them all to bid and you’ll likely be slogging through proposals – many of them unprepared to handle your business - for months. It’s a huge waste of time for you and your potential suppliers.
Including a qualifying round in your RFP process helps ensure bidders are limited to those who have the abilities to meet your requirements, and if selected, can successfully implement the program you need. Here’s the good part. It’s very easy to add a qualifying round. So easy you’ll wonder why you haven’t always done RFPs this way.
So what does an RFP with a qualifying round look like? Basically, your RFP now has two parts:
This round will involve a short, concise questionnaire all interested companies must complete and submit before advancing in the process. It should be structured so that your RFP review team can work quickly through each submission to confirm qualifications.
Once you’ve narrowed the field, invite the pre-qualified companies to submit formal proposals.
Here is the information you should ask for in the Qualifying Round:
Category 1: Company Profile
- Are you a national, regional or local supplier?
- What is the size and scope of your company, including number of facilities and where they are located?
- Are you company owned and operated, a third part affiliate or a strategic alliance for bidding purposes?
- Do you own and operate your own fleet or rely on a third party/common carrier?
- What is your annual volume for recycled pallet and retrievals?
- What is your financial profile (i.e.- liquidity, debt structure, cash flow, etc.)?
Category 2: Risk Profile
- What is your employee profile – full time, part time, contractor?
- What are your processes for background checks and compliance (especially important for on-site contracts)?
- Do you employ your own drivers or are they contractors?
- What are your safety policies and training programs?
- What are your insurance requirements?
Category 3: Capabilities
- How are transactions tracked and reported?
- Are your operations paper-based or digital?
- What are your billing and payment processes – EDI, EFT, consolidated invoicing, net out?
- How is your second tier reporting handed (sustainability, diversity)?
That’s it in a nutshell – it’s literally a one-page document that will elicit the information you and your team need to determine which pallet companies should participate in your RFP and which should be on the bench. You will save a ton of time and have more confidence in the final RFP submission.
There’s just one last step 48forty recommends in your RFP process before you get down to decision-making time and that’s supplier site visits. I’ll be writing about that next week. Stay tuned! You’re almost ready to run the best RFP your company has ever seen!