Transcription
Hey there, fellow marketers. Professor Wolters here. And today we're going to talk about our requests for proposals. Basically, what these are, this is when a firm kind of announces, "Hey, we need help, suppliers, could you deliver something that can solve our problem?" And here's kind of a background, so you know what we're gonna do. Okay, that's the kind of overall idea of what one is. And what I want to kind of go through today are the different parts of requests for proposal.
So for example, if a school system is looking to build a new school, they'll put out a request for proposal saying, "Hey, builders and contractors out there, we're looking to build a new high school that'll hold 2000 students in a public school setting." They'll have this kind of idea, and then companies will come with proposals for them. That's why it's a request for proposal, okay?
Now, when you make your request for proposal, what you're going to do is you're going to start out with a statement of purpose. Okay, this really says what the firm is searching for, in terms of general products, general services, overall objectives, what they want to get done in this contract. Okay, so it could be we're looking to build a Montessori elementary school, you know, which is a non-traditional school, okay, we have an idea of what we're looking for. So if a construction company's out there saying, oh, they want to build a school, do we build schools, do we build, you know, professional buildings, do we just build houses? That can let them know right away if it's a project that they might be interested in. Because if all I do is build houses, I see that they want to build a school. That's not what we do, okay? But if there's one that does do industrial buildings and things like that, we do build schools, hey, this could be interesting for us. So that's why you start off with a nice little statement of purpose, okay?
Now, the next thing you have is what we call background information, okay? This is where you're really going to talk about the company, you're going to talk about what you- your dreams and wishes are, what you kind of stand for, your values, these kind of things, so suppliers have a better understanding of what your company will kind of want. Okay, so, if you're looking at a Montessori school, for those of you that have not been to a Montessori school, Montessori schools don't have desks. There's not a teacher in front teaching students like, a plus b plus c, no, students learn on their own. So there's a lot of open space, a lot of windows, a lot of different nooks and crannies and stuff like that. So it's not that traditional classroom that's just a square with desks in it, okay? And so companies would need to know that if they're going to say, "Hey, look, here's our proposal for your Montessori school." Now, in this background information, you might be putting stuff about your SWOT analysis in there, okay. Basically, any relevant information that's going to help them understand, you know, what your product is. So if you're a university looking to put in a new computer system, you might say, we have 42,000 students and 10,000 faculty, we will need, you know, installation, we will need training, we'll need maintenance for this. And that lets companies know, like, oh, they're gonna need maintenance. Yeah, we just do installation, we don't fix up later. This isn't for us. Okay, so you're kind of looking at that.
And that kind of leads into what we call the scope of work. And this is where we really lay out what is expected from the supplier. Okay, what's exactly expected? Okay, so for building that school, what all does that entail? Well, we want you to build the building, we want you to outfit the rooms, we want you to build the parking lot, we want to make sure you- we have a playground out there is well, you're laying out all these different parts that need to get done. And the thing is, a lot of times what will happen is with the scope of work, you're using this when you're gonna deal with a lot of subcontractors, because you want to make sure everything is laid out there; don't just assume, well, yes, if we're building a school, obviously, they're going to put a parking lot in, obviously, they're going to put in a playground, they might not. You want to make sure all that's there, this is for the entire child experience when they're going to school from when their parents drop them off at the front or the bus drops them off to the bus picks them up. So it's everything in between there. Okay, so you might want to look at those things, alright?
Now, the next step you have is what we call the outcome and performance standards. So here we're looking at our outcome targets, our minimum performance standards, you know, what does it need to do? So that might be if we're looking at that computer system, we need it to work at least 98% of the time, the internet needs to function at you know, 100 million gigabytes per second, whatever, you're really laying it out specifically, what you're going to be monitoring, how we're going to know if they're doing a good job or a bad job. But also we're going to talk about how corrections will be dealt with. If the system does not work at 98% of the time, what is the ramifications for that? And how are we going to judge those outcomes? Like when is it going to happen? Is it for those computer system? Is it a random Tuesday? Is it at three o'clock in the afternoon? Is it you know, for an entire month overall? How's that going to be done? So we can kind of have an idea of what we're going to be looking at, what we're going to be judged against. I mean, it's kind of like when you're a student, you want to know that syllabus because you want to know is like look, what am I going to be graded on? Well, this is where we're putting what the supplier is going to be graded on, okay?
Now the next thing you're going to have in your request for proposal is the deliverables. This is kind of like a checklist of all the stuff that's going to be there. Okay, so if it's that computer system, right, we're gonna- we're gonna deliver 10,000 computers. Okay, check, there's 10,000 computers, 10,000 mouse pads, check, 10,000 mice, mouse, you know, for the computers, check. You're listing all these things out there and because you want to make sure everything gets delivered. So if you're building that school, you're paying for every single electrical outlet, you know, it could be 20 bucks per outlet, so you want to make sure every single one's there. And if you see that, look, we only have 25 outlets, and we paid for 30, where are those other five? Okay, so you want to make sure that deliverables there, so you can have it checked off your list, okay?
Next thing you're gonna look at is your terms and conditions. So this might be the start date of the contract, the length of the contract, when the contract could be renewed. Because for some companies are like look, I want to be a supplier for you this time, so I can be a supplier for the next time, the time after that, and the time after that.
And the next part, we're going to talk about payments, incentives, and penalties. And I know I've talked a little bit about penalties before, but this is where you really lay things out. So here we're going to tell them, you know, what is the payment process going to be? Are you going to pay them all up front, or half up front half at the end, or is it only paid at the end? Do you set it up that hey, who covers the the Met mistakes and mess ups? Oh, we were building this wall, and it's not tall enough, we gotta rebuild it, who's paying for that? You kind of leave those things in there. But it's not just about the penalties, you're also looking at is how to reward them if they're doing a good job, if they get it done sooner. Let's say we got this computer system, and they finished a month early, we can get it started, do they get a bonus for that? We kind of put those things in there. And we kind of lay out what is inadequate or unacceptable performances. We're going to put that in there and what the different kind of penalties are, so that that 98%, what if it's only at 97%? What's that penalty? What if it's at 90%? What if it's under 80%? What are the different penalties that are going to go into that? Okay?
Now, next thing we're gonna look at, you're gonna put in there is what we call contractual terms and conditions. So these are your standard contract forms. So if we're building a school, I want to make sure that you have to have a certified architect, a certified engineer okaying all the plans, because I don't want somebody that just says, I like to build schools to build it, and then it falls down. No, no, no, I need the certification. If we're looking at putting that school together, are we gonna have a nurse, well then we're gonna make sure that that there's a certified nurse practitioner that's in there, okay? So we're looking at these kind of things.
Now, the next part is now you've kind of gotten all this stuff out there, like, look, here's what you need to know to get started. So when you got your proposal ready, now we put out their requirements for proposal presentation, because you might have multiple suppliers coming back to you, okay, and they're going to be giving you different things. And the thing is, it's really difficult to, you know, to judge an apple versus an orange, it's really easy to judge apple versus an apple, right? So what you're going to do in these requirements for proposal presentations, you're really going to list out how the product will be presented to the firm, what documents you need, what's going to be included, you know, how much time they're going to have to present for, these kind of things to make it easier for you to compare, like, here are the five things we're really thinking about. So let us know about that. So everyone focuses on those five things.
And that kind of leads into the next step. And that is the evaluation and awards process. Here's where you really lay out the criteria for how the winner will be decided. Is it who can get it done first, is it can- who can, you know, do it under budget, or who can make the prettiest building? Whatever, you're laying out that criteria, so that the companies know what they should be really shooting for, okay? It's not just, oh yeah, we'll just put something together. Well, no, if they want to know which one can be the most safest building, well, that's what they're gonna judge on, not on the cheapest. We need, you know, we're gonna put some, you know, iron steel bar reinforced stuff in there. Okay, so you kind of think about those. And so you're gonna put in those important factors, you know, how do you weigh each one of those things like that, so people know.
All right, then the next thing that I put in is what we call the process schedule. So when things are going to happen, so the exact dates for each part, when you're- you have to let them know if you're going to compete for this, when is the proposal due, when you'll make your decision, all this kind of stuff that goes in there as well.
And then you finish off with all the pertinent contact information. Okay, we need to know is if I have questions about the curriculum at that school, who do I talk to? If I have questions about, you know, the the size of the school, who do I talk to? If I have questions about, you know, restrictions in that town's building codes, who do I talk to? You put that contact information in there, so the supplier knows if they have questions, who can I talk to, to kind of clarify things, so I don't mess up, alright?
Now requests for proposals. Are they fun? No. Are they a part of life? Yes. Will it be part of your job you hate? Probably, okay? But they're important because we want to get all these different proposals coming in. So then we can kind of look at them and say, hey okay, what does this proposal have that I like? What is this one I have that I like, could we take some from each one and figure out what works because that's sometimes what you do is like, I like both these proposals. And you might come back and say, look, that you're the two finalists, we like what you have, can you do something else, okay? So it really does help you out and therefore helping you solve that problem that you've asked these suppliers to solve. So I hope this helps you understand better what a request for proposal is. If you want to learn more about B2B business, click subscribe, bye.