In Praise of RFPs

The use of the request for proposals (RFP) and its cousin, the request for information (RFI), are both seeing less use these days.  This is an unfortunate development.  As vendors tighten their flexibility on contracting, frequently refusing even basic protections, the use of an RFP or, at least, an RFI, can create competition between and among vendors, generally leading to better pricing and contract terms.  

Frequently, managers claim there are no reasonable alternatives and that this particular vendor is the only one that provides the relevant services.  This is almost never the case.  Alternatives do exist.  Even if those alternatives may not initially appear viable, the use of the RFP process may bring to light new information about their capabilities and, at minimum, lead to at least some semblance of competition.  Without that competition, vendors frequently and very quickly conclude that “they have the business” and are far less inclined to be flexible on contract terms.

In today’s environment, more than ever, businesses must use every tool at their disposal to get the best terms possible in their vendor contracts.  The RFP can be one of the most important of those tools.  While it may require additional steps and, potentially, additional time, the result is almost always worth the effort.  Otherwise, the customer will be negotiating from an inferior position from the outset.

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