The RFP process looks different in 2022—here’s why.
By Jamie Friedlander Serrano
The COVID-19 pandemic shifted our world in both obvious and subtle ways. One of more subtle shifts occurred in the way people shopped—countless brick-and-mortar businesses closed their doors and moved the bulk of their business online. In turn, stores saw less foot traffic than ever before. Add in pandemic-related supply chain shortages and accelerating inflation, and businesses have been seeing disruptions unlike anything in history.
Jim Owens, Chief Growth Officer at SDI, a supply chain management company, says these changes have created a “perfect storm” of activity, and as a result, he believes requests for proposals (RFPs) are going to increase both in 2022 and 2023.
“It used to be about reducing costs,” Owens, who oversees his company’s business development and marketing department, said. “Now, it’s about controlling costs and looking for new and better ways to do things. I suspect we’re going to see a whole lot more RFP activity as organizations look for different ways to do business.”
David Acquaviva, Divisional Vice President of Non-Merchandise Procurement at Transform SR Holding Management LLC, who is responsible for everything behind the scenes, including facilities maintenance, loss prevention, fleet, marketing and HR for brands like Sears and Kmart, said there is significant deferred business because both customers and employees were not in brick-and-mortar stores and corporate centers as many products were shipping from warehouses and the backrooms of stores for such a long time.
“There’s a lot of pent-up demand out there for this deferred maintenance, but we don’t all have endless pockets at this point either,” Acquaviva said. “It’s going to be about prioritizing and strategically going after what’s important during these necessary times.”
Room for Improvement
Let’s say a business — which could be anything from an elementary school to a popular clothing shop — decides they need a new parking lot or roof. They’ll send out an RFP to facilities maintenance organizations, contractors and other suppliers within a particular trade who will then submit a proposal outlining how they can solve that business’s opportunity, and how much it would cost. Companies will then choose a supplier based on their price and the total cost of ownership (TCO), Acquaviva said.
The RFP process has been around since the 1880s, when companies would put out requests for suppliers in local newspapers. Over the years, the process has evolved significantly due to shifts in technology, like the rise of the fax in the 1960s and the internet in the early 2000s. But experts say there’s still ample room for improvement despite these advancements. In fact, 77% of RFP professionals say their proposal process isn’t ideal, according to the Association of Proposal Management Professionals (APMP).
Acquaviva said organizations are in different stages of maturity, and in turn, they have different forms of RFP technology. Some mature companies have sophisticated online bidding tools that show a supplier’s rank in real time. Other companies simply put out an RFP and suppliers must trust that the company will be in touch regarding their rank. “That’s part of the problem — there’s no standard,” Acquaviva said. This leads to frustration from suppliers, because every time they submit a proposal, they have a new tool or process to learn.
“Are the tools getting easier to use? Yes. Are some of the tools getting less expensive? Yes. But there’s still not an industry standard, like the way most organizations use either Gmail or Outlook,” Acquaviva says. “There isn’t one tool to say, ‘OK, this is how we’re going to do online bidding with procurement.’”
The average public sector RFP is a whopping 116 pages long, with most proposals coming in at an average of 144 pages long, according to APMP. Because RFPs are often very long and prescriptive, Owens believes requests for solutions (RFS), should also be considered, as they’re more general and less specific. Instead of asking for a detailed renovation plan like an RFP would, an RFS might say you want a better brand image or an improved customer environment. Then, suppliers can use their industry knowledge to come up with a solution, Owens said.
“What an RFS does is give the suppliers a vision of the future state that you want and then says you have the autonomy and flexibility to design a solution that gives [an FM] those outcomes and those results without confining you to certain activities,” he said. “That way, it really fosters innovation and creative thinking, as opposed to saying I want to buy this facility service pretty much the same way I’ve bought it for the last 10 years.”
After an RFS, a company can then issue an RFP in order to get more detailed solutions for specific services, Owens said, meaning both processes can still be leveraged.
Putting Your Best Foot Forward
Because RFP activity will likely increase in the coming year, it’s important for suppliers to think outside of the box, which often involves embracing new technology, Owens said. “Look outside of your traditional industry boundaries and see what people in other industries are doing to solve similar problems — and be willing to change,” he said. “Right now, we’re in a very disruptive environment, so you have to be flexible and adaptable to survive.”
Acquaviva agreed. Because the pandemic shifted the way we interact with one another, it’s now more important for suppliers to get creative about how they maintain the professional relationships necessary to acquire new business.
“It’s more difficult for suppliers to get their foot in the door now because they don’t have the opportunity to say, ‘Hey, let me come meet you at your corporate center,’” he said. “At many organizations, a significant number of the employees are no longer at the corporate center. Many associates are working from home and/or not obligated to live near the corporate office. Some salespeople would stop in our office once a quarter, sit down for 30 minutes and touch base on current and future opportunities. Post-COVID, that doesn’t happen anymore, so suppliers have to find different ways to get business’ attention virtually without over-inundating the multi-site organizations with email or phone calls.”