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Business 'etiquette 101': an over-the-top request for proposal prompts Ashley Balls to sound a caution for businesses that use the RFP methodology.

The accepted method for a large (or small) company to engage a specialist service business for an assignment has always involved some kind of beauty parade--after all, this is what free enterprise and competition is supposed to be all about.

Over time the methodology has changed. In the '70s recommendation was the key. Work was handed out to those 'in the know' or by referral. Draft proposals for new work were invariably accompanied by directions on whom to contact in order to obtain a satisfactory reference. It all worked reasonably well and jobs got handed out.

The '80s and '90s introduced 'beauty parades', where hapless prospective contractors and consultants had to put on a 'show' to prove that they understood what the clients wanted. This was supposed to introduce some transparent competition to the process--however it didn't as only those with good presentation skills got through.

However, one thing it did do was develop the notion of an RFP (Request For Proposal). This is supposed to be the fairest way to get assignments filled.

As ever, the methodology is open to abuse and contractors end up spending more and more time preparing RFPs for organisations when 'preferred' suppliers may already exist.

Enter the Internet

The 21st century has seen yet another twist to the 'sport' that RFPs have become. Now the Internet is used and company websites utilised to seek contractors and staff. Clearing houses have opened where specific business sectors can 'post' their requirements and would-be contractors respond.

This method is no better than before and equally open to fickle behaviour by companies. Moreover it has not reduced the time and effort required--quite the reverse. It is much like the meat market (aka recruitment) where employers use third parties to advertise and conduct preliminary interviews with prospective employees only to then conduct more interviews and psychometric tests before engaging the services of whoever might be left looking. It takes a longer time, costs a fortune and no one is any more certain that the new 'hire' will meet the requirement or stay in the job than if they had used good old fashioned 'judgement' in the first place. The method has been developed at the same time as HR departments have grown exponentially in numbers. However I digress.

RFPs are opportunities for businesses to explain their specific needs and to seek out those able to best satisfy them. The objectives are; define the task, describe the desired outcome, outline the required skills, and issue an invitation to treat. Sometimes additional 'conditions' are appended e.g. the timeframe or approximate price.

Most businesses have settled into a rhythm where standard 'templates' are issued setting out the primary requirements. These documents are generally a sound indication of what the contractor can expect in terms of corporate 'culture'. If terms and conditions seem 'over the top', don't waste your time is the message. The other one to watch out for is the RFP designed to fit only one person or organisation. If it is not you--steer clear.

Last week a new model arrived--a 26-page diatribe where the description of the requirement was dwarfed by the terms and conditions that apply. The second page carried an ominous warning that it was 'not to be copied without permission'. Furthermore, details were not to be disclosed to a third party. The latter was clearly unenforceable as I downloaded it from a third party website!

I guess that first mistake should have warned me off but foolishly I read on. I had to wade through to page eight before reaching the RFP objectives. Comically, the design of the required programme objective was then set out in terms clearly indicating that no flexibility was required. All the 'Mickey Mouse' management phrases were spewed out; 'strategic goals', 'continuous learning', 'challenge', 'feedback', 'learning outcomes', 'scoping', etc.


It got worse--much worse--the next five pages comprised instructions to the respondents using 41 sub-clauses! These contained a number of gems including how to address the envelope, to use clear and concise English (after all it is an education programme), four clauses on confidentiality, a refusal to allow a contractor to withdraw (despite it being six months before a decision may be made) and a long list of exactly how the company can alter any terms without notice. One of the more bizarre 'terms' informs the reader the company can interview your staff and visit your premises at any time during the evaluation process.

To add insult to injury no correspondence will be entered into covering reasons for rejection so if you want to spend a couple of weeks of potentially chargeable time constructing a detailed proposal, which remains the property of the company, is subject to change without notice, on payment terms governed by the company, be my guest. As for me I will be using it as a model of how not to treat with professional advisers.

If you want to know the identity of the company I'm referring to, cast your mind back and try and remember who it was who spent $100 million on an infrastructure project application only to withdraw when it became clear the consultative process had failed to identify community objections strong enough to scupper the whole thing.

Ashley Balls is senior partner of LegalBestPractice. email:
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Title Annotation:issues with balls
Author:Balls, Ashley
Publication:NZ Business
Date:Nov 1, 2004
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