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PRIVACY POLICY

Court Stevens

Tender Bids vs. Requests for Proposals: A Decision Model

by Court Stevens

Deciding between using a tender bid (i.e., a low-cost bid) and a Request for Proposals (RFP) can be complex. Are the services and work involved in your project clearly defined, or are you giving proponents a desired outcome and asking them to suggest how to get there – or is it a mix? Do you definitely want to enter into a contract? Is price most important, or are ideas what count? If you choose your model incorrectly, you may end up in a contract obligation you perhaps didn’t want, or hobble proponents by being too prescriptive.

For your next project, try using this matrix before you start your procurement process, to help you decide between using a low-cost tender bid and an RFP.

Tender Bids (i.e., Low-Cost Bids) vs.
Requests for Proposals
Comparison and Decision Model

Tender Bids

(e.g., tenders and specific quotes, such as product-based quotes)

Thoroughly detailed work (e.g. construction tender) or a specific, product-based quote

*Tenders (and usually product-based quotes) are evaluated using mandatory selection criteria only. Award is based on the lowest qualified price.

*Services-based quotes (optional) can have both mandatory and preferred/ desirable (scored) evaluation criteria, with the emphasis (i.e., highest weight or score) on price. Vendor profile and capability would be scored with less weight. Award is based on the quote with the best overall score.

Determining Factors

   YES   
<<<
Service(s) / work, methods and outcomes are clearly defined and specified.

NO
>>>
YES
<<<
The contract award is based on evaluation criteria that places a higher weight on price than value.

NO
>>>
YES
<<<
There is a definite intention to enter into a contract.

NO
>>>
YES
<<<
Industry / market have specific quantifiable / qualifiable expectations.

YES
>>>
NO
<<<
Problem-solving techniques for strategies have a greater emphasis.

YES
>>>
NO
<<<
New or alternative methods, technologies, innovations or creativity are sought.

YES
>>>
NO
<<<
Some of the services or work can be specified, while some of these required services or work cannot.

YES
>>>
NO
<<<
The final results / outcomes, deliverables and process, including methodology, are clearly defined and can be specified.

Not Usually
>>>
SEE *
<<<
Award is based on a list of evaluation criteria (both mandatory and preferred or desirable) and price. See note below.

*YES
>>>

  Note:

  • Mandatory Criteria – Must have (Yes / No)
  • Preferred / Desirable Criteria – Should have (Scored)

Request for Proposals

(i.e., best value)

Use RFI / RFEI / RFQ prior to the RFP.

Professional / Consulting Services

Blended RFP

*RFPs have both mandatory and preferred / desirable (scored) evaluation criteria with the emphasis (i.e., highest weights or scores) on the solution, approach or methodology and proponent profile and qualifications. Price would have the least weight or score.

© 2006 DC Stevens Consulting Group Inc.
This article is reprinted, with edits, with the author’s permission.
It originally appeared in The Legal Edge Issue 64, December 2005 – January 2006


 

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