

RFPs Will Kill Us All - maxcameron
http://bigbangtechnology.com/post/rfps_will_kill_us_all

======
tptacek
3/4 through this article I started wondering whether this was some kind of
Swift-ian satire about the graphic design "spec work" argument. I don't think
it is.

Here's the deal: it's called supply and demand. If clients have 10 quality
firms to choose from, and they pay their firms enough, then building an
excellent RFP is simply going to be the cost of doing business with them.

Sometimes, some firms are so good, and provide output that is so hard to match
with any substitutable firm, that they get to set the terms for the
client/vendor relationship. Those firms know who they are, because they have
waitlists, and are already turning down clients.

If you want to boycott RFPs, by all means, get your lunch eaten by the
companies who are willing to throw those two extra non-billable days at the
task of making themselves extra easy to work with. But I don't think you're
going to manage to demonize the RFP process the way designers have the spec-
work process, because RFPs are simply the way consulting works.

~~~
drewcrawford
> because RFPs are simply the way consulting works.

Not all the time. I never respond to public RFPs, and neither does the OP.
Apparently in our (separate) niches, you can get by just fine.

Agree with your point about supply and demand, but good hackers are (nearly)
always in demand, and so can nearly always find work. It's the strange
outsourced companies that spend all their time searching for work that end up
responding to RFPs, and that's dangerous even to clients.

Look at it this way: if you have a pool of proposals sitting on your desk, 90%
of which are from firms that are simply incapable of doing the job[1], and you
are a business/nontechnical chap, it's going to be difficult to find the 10%
who are capable, let alone competent.

Meanwhile, technical guys who are good hackers but don't understand this see
lots of firms sending out and responding to RFPs and think this is how it
works, so I guess we have to do it too.

[1]
[http://www.elance.com/php/search/main/eolsearch.php?matchTyp...](http://www.elance.com/php/search/main/eolsearch.php?matchType=profile#page=1&matchKeywords=iphone%20developer&sortBy=&sortOrder=1&bizFilter=false&catFilter=10183&indFilter=false&premierFilter=false&feedbackFilter=0&reviewsFilter=0&minrateFilter=lt20&locFilter=&regionFilter=&zipFilter=&zipRadiusFilter=50&skillFilter=-100&groupFilter=)

~~~
tptacek
Knowing what I know about the bill rates for the kind of work we do versus the
kind of work you likely do, I'm going to humbly suggest that we're in more
demand than you are (not a value judgement, just an observation about
scarcity).

We absolutely do respond to RFPs, when they're for projects we want to work on
or clients we really want a relationship with. And we always spend serious
otherwise-billable time on proposals, even though that's the same speculative
work that this article argues against.

It's important to us to be easy to work with, because we want good projects.
We don't want to confine ourselves to whatever lands in the margins of
"unusually liberal clients"; those clients don't necessarily have the best
projects.

I read the other post referenced on this thread, and so I'll add that being
able to smoke out the bogus RFPs you shouldn't waste time responding to
(because they indicate inept purchasers, or, for instance, because they
probably mean the client is in the tank for another vendor) is just one of
those things you need to be able to do to succeed as a consultant.

~~~
ajju
Any pointers on how to identify clients already in tank with another vendor?
Being overly specific in the RFP and demanding the exact features a vendor has
is a clear giveaway but I am wondering if there are any other signs.

I am new to this RFP business.

~~~
tptacek
We get on the phone before we respond to expensive RFPs, and there are
questions you can ask (incumbent vendors, past experience with vendors, is
there a formal requirement for the RFP, or do they genuinely want real
proposals, etc).

On "real" RFPs, especially if you have a good shot, you'll find the purchaser
you talk to is accomodating; they'll set aside time for calls to answer
questions, and they'll do a good job with your Q&A submission (as a general
rule, real RFPs have Q&A phases, though note that you never know whether your
Q's are going to other vendors too).

There is an old negotiating trick a bizdev guy taught me once, which is, if
you want to figure out whether a deal is real or whether the other side is
just wanking, figure out a reason to schedule a meeting on a Saturday. If the
deal is big and the other side is serious, they'll do it. Similar idea here,
although less aggressive.

If your firm's way of handling the RFP process is to simply pick up the forms
off some website, mail them in, and hope, then yes, I can see how the RFP
process would upset you.

~~~
ajju
That's great advice. Thank you!

------
easyfrag
I work for a publicly funded institution, in our jurisdiction we have to go
through the RFP process. It is either an RFP (where we are allowed to do an
evaluation of who "best" met the requirements - using a pre-defined scoring
criteria) or a straight tender where we have to pick the lowest bid that meets
the requirements.

I sympathize that it is very difficult to produce a proper response to an RFP,
however as one who evaluates those responses let me tell you it is quickly
evident which vendors spend the time to do so. It is also painful on the
client side to prepare the criteria on which to fairly evaluate the responses.

It is an imperfect process and definitely more of an art than a science but
the good news is that a well-defined RFP will often signal a client who
understands their requirements.

------
9oliYQjP
Most consultancy firms that don't respond to RFPs eventually die. Of those
firms that survive, they could be viewed as a collective of successful
freelancers. There typically is not enough revenue to grow the company beyond
the founding consultants because the project budgets that they deal with are
typically $15K to $50K. You can definitely get away with not responding to
RFPs if you're only ever dealing with budgets of tens of thousands of dollars.
Also, an RFP is a way for customers to weed out the "I just quit my day job at
an agency and started my own consulting company" firms. These customers want
to deal with bigger firms because they expect these companies to be around for
a while and provide support years down the road. A bigger company can afford
to devote a few employees for a couple of weeks to address an RFP properly.

~~~
tptacek
I _thought_ we put a lot of effort into RFPs, but wow, 2 employees 2 weeks is
crazy. For us, it's more like 1-2 days.

~~~
9oliYQjP
Depends on the project. A lot of website RFPs can be done in a crunch session
of 1 to 2 days. I've had to bid on systems that interacted with assembly lines
and ones that involved dealing with the government and getting security
clearances. These latter two took 2 calendar weeks although the people
involved in putting together the RFP were definitely not working full time on
it until the last minute. All in all you might have 1-2 days of actual work,
1-2 days spent Q&A attending meetings with the client and other potential
vendors, etc. The time can add up.

I have seen one ridiculous "RFP" that a government agency up here put out
recently in which they wanted potential vendors to essentially do 6-8 months
worth of work and if they landed the project, they'd end up with a long term
multi-year contract. We're talking tens of millions of dollars here, but
still, that one struck me as quite the lottery and I'm pretty sure the only
companies that responded to it were the big names consultancy firms.

EDIT: here's the results of that RFP...whaddaya know look which firms won the
bid:
[http://www.newswire.ca/en/releases/archive/October2009/21/c8...](http://www.newswire.ca/en/releases/archive/October2009/21/c8969.html)

~~~
alex_c
It might be willful ignorance on my part, but I really want to believe that
eHealth is the (unfortunate) exception, and not how IT usually works - even
when we're talking about government contracts.

~~~
9oliYQjP
I've done some work for a Federal government agency a few years back and a
provincial government within the past year. eHealth was exceptional not
because of the cost but because nothing got done.

Here's where posting anonymously is beneficial (but alas since it's anonymous,
take my account with a grain of salt). My opinion is that a select few large
IT companies in Canada have a virtual monopoly on all government work. In
fact, the only reason that I was involved in these projects was because
certain teams from these companies screwed up so badly that some bureaucrats
formed a skunk works side project to move things along. There was an unspoken
understanding that the government wouldn't sue and shake the boat, but that
they'd screwed up badly and needed to let another party try to resolve the
situation.

Pretty much the only way you're going to get access to government contracts is
via sub-contracting for these firms. To bring this post back on topic, the
reason that this happens is because in a bid to try to account for government
spending, the government issues these RFPs that are so lengthy and cumbersome
to accomplish that only the big companies can actually pull them off. But it's
a premature optimization and means that the government spends more money than
it needs to. It's not unheard of for a simple web application to have a budget
of CDN$1M. This would be something that your typical YCombinator team could
pull off in 3 months and US$17K.

Some of the more successful government projects that I've heard of are ones
where you have a bureaucrat that hires acquaintances without an active bidding
process, because they can vouch for their expertise. Stuff gets done quickly
and correctly the first time because there's little red tape to work around.
Unfortunately, eHealth involved friends hiring friends and stuff just not
getting done. I always thought that the criticism of eHealth folks hiring
people they knew was less of a concern than the fact they simply didn't get
stuff done. I mean think about it, in the private sector do you get people to
actively bid on every little position and project or do you have your go-to
guys?

Anyways, my opinion is otherwise largely positive with government work here in
Canada. They seem to spend more money than I think they would if they let
smaller more agile companies into the fold more often. But stuff seems to get
done and when it doesn't (e.g., eHealth) you hear about it. Most of the
government people I've worked alongside care very much about their job and
doing it well. It wasn't unheard of for them to reply to my off-hours
questions on their Blackberries on a weekend. So all is not lost. If I'm a
little bitter, it has to do with what I perceive to be a rigged RFP process
that favours these big vendors.

~~~
maxcameron
This is a really well thought-out response. Even though people would probably
like to describe eHealth as an exception, I think that situation really
exemplifies the problems I was trying to expose in the RFP process. It's just
another reason it's a bad system.

~~~
tptacek
No, it exemplifies what's wrong in the GSA-style procurement system, where the
process is deliberately complicated and biased towards a small number of
institutionally-accepted contract holders. It has nothing at all to do with
the bare concept of an RFP, and does not reflect the nature of RFPs outside of
FedGov.

------
zachware
The article is well thought out and presents a good viewpoint. I think it's
one-sided and, um, short-sighted.

I see the RFP process from the viewpoint of a buyer and a provider. From the
buyer's standpoint, when we start a project we simply don't know what firms
are capable of doing what we want done. The RFP gives us a level playing field
to compare costs, capabilities, and experience.

Without an RFP, particularly for complex projects, you can spend months
scoping out capbilities, refining your needs (both of which you should be
doing AFTER you form a relationship.)

Which takes longer for a firm? Researching an RFP and presenting a document
for a potential client's review or spending eight months going back and forth
trying to figure out what to build. Of course, the latter. The difference is
that providers get paid for those eight months (a plus for them) while buyers
get nowhere.

------
madmotive
Our approach is to respond to RFPs with a fixed-rate proposal development fee.

Anyone that's good enough to be in demand should do the same. Clients that
expect you to do work for free will probably turn out to be difficult people
to work with in the long term.

~~~
tptacek
Do people tend to actually pay you to develop proposals? Or is that just your
way of turning down RFPs?

I make this same observation every time the spec-work argument comes up (if
you haven't picked up on it, I'm also not against spec-work):

When we were just getting started, lawyers from WSGR and another firm spent
literally hours on the phone with us, for zero money and no promise of ever
being compensated, presumably because the fact that they're willing to be that
cool to work with costs them very little and makes them incredibly attractive
in the long run.

I want to be like them.

~~~
madmotive
Good point. So far about half have paid.

I guess the main reason this works for us is that we prefer smaller projects.
We don't aspire to being a huge consulting company / agency taking on bigger
and bigger projects. We like working on small projects that grow into bigger
things.

~~~
tptacek
Just be aware that you're not only restricting the size of the projects you
take on, but also the selection of clients you have to work with. Some very
excellent projects will require competitive proposals for you to get in the
door.

------
rdl
The normal way to solve this in government and big dumb companies (which issue
RFPs) is to have one domain-specific expert firm awarded an RFP management
contract, recusing itself from the actual implementation contract, which then
specifies what will be in the RFP. Judging the proposals is a combination of
the client and process-management contractor, and in some, the management
contract manages the ongoing relationship with the contractor as well.

It's inefficient for best case (you have 2 contracts instead of one), but
solves a lot of worst-case problems (bribery or incompetence leading to a
rigged bidding process, companies awarding themselves contracts, or buying a
perfect but wrong thing).

I'm not sure of the background of the author, but RFPs are standard in a lot
of domains.

------
MichaelTroy
For the most part, I view the RFP as a way to encourage wrong and ill-fitting
service providers or third party consultants to engage with your company or
business. Simply put, an RFP is just a tick-a-box approach to seeking skills
and services externally. The tick-a-box approach and mentality by it's nature
sets up a very black and white context. This is the problem. Business for the
most part is not purely objective.

A better approach I think, would to be more proactive and approach only those
service providers or companies that are somewhat aligned with your business or
company values and vision.

Another solution (for bigger companies) would be to fund smaller independent
teams to consult as an acting external supplier.

------
billymeltdown
Nice article, Max. Carl from nGen Works has an interesting post up of late on
the same topic:

[http://www.ngenworks.com/blog/detail/from_the_archives_chapt...](http://www.ngenworks.com/blog/detail/from_the_archives_chapter_1_answering_rfps)

------
bengtan
Mike Bosworth's two books Solution Selling and CustomerCentric Selling talk a
bit about RFP/RFQ's.

The authors note that most RF[PQ]'s are prewired and biased towards a
preferred vendor. The client gives out the RF[PQ] so the client can say it was
properly competed for so it can pass the approval process in upper management.
If you are not that preferred vendor who was there from day one, you will most
likely not win.

The author cites one anecdote of a big company that has a separate department
that only handles RF[PQ]s. One day they decided to take some metrics over a
time period. Out of that time period, they submitted 153 bids to unsolicited
RF[PQ]s ... only won 3.

~~~
tptacek
Some RFPs are definitely rigged. Spotting them is part of being a good
consultant. See upthread for a deeper discussion on this.

"Most" RFPs are not rigged.

A company that submits 153 RFP responses and wins only 3 has a problem, and it
isn't with the concept of RFPs. Perhaps their pricing is wildly out of whack.
For awhile, there were things we did wrong with our proposals that cost us
several RFPs. We figured them out, resolved them, and systematically improved
our win rate.

There is no way that 1.9% (or even 5%) of RFPs are bogus.

------
kristianp
In case anyone's wondering, RFP (probably) stands for Request for Proposal

<http://en.wikipedia.org/wiki/Request_for_proposal>

~~~
tptacek
FWIW: An RFP is just a company's formal process for documenting an upcoming
project and soliciting proposals from multiple vendors for it. There are as
many RFP processes as there are companies running RFPs.

------
HistoryInAction
Hmm, this perspective seems to ignore growing services like InnoCentive and
Aardvark to connect people with knowledge to buyers. I'm not sure about the
pricing equilibriums in play, and I'm not sure about the relevance to RFPs. Am
I relating two frameworks that shouldn't be?

------
lsc
hm. well, personally, I find 'relationships' in business usually raise costs.
How to get around this? I don't know.

You could simply only buy commodities. If this is possible, it is clearly the
best answer. However consulting isn't a commodity, and neither is design work.
it seems that making it a commodity is a 'hard problem' - RFPs are one attempt
to treat consulting as a commodity, and they are obviously imperfect.

