You’ve probably heard the adage: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Good advice if you’re trying to feed someone, but not so good if you’re trying to produce a strong request for proposal (RFP) for waste services. “Fishing”, in the context of an RFP, means asking the suppliers for more options than you reasonably need.
Although it’s technically possible to ask for an unlimited number of options in an RFP, the practical limit should not exceed six. Municipal Councils and staff can fall into a trap with RFP options because they want to know the real (bid) cost of the next possible recycling or diversion opportunity for their community, but, they still need to provide the existing service and want to compare the newer options with the existing services.
“The CIF helped us prepare a new RFP and guided us through the process of writing the scope of work and evaluating submissions, all of which led to a good, clean result that we presented to Council. Council was able to see the benefits and we’ve just awarded the new contract. Streamlining the RFP made this really efficient and we’re pleased be able to move forward quickly.” — Adrian Tomasini, Operations Manager Municipality of Hastings Highlands
How does this play out?
The following scenario illustrates some of the ways to get trapped:
1. Asking for too many pricing options
A municipality has weekly curbside collection of waste and recycling plus MRF processing paid on an annual flat rate basis. They want to know if switching to payment by the tonne or by the stop is more economical. A reasonable goal for an RFP that would require a proposal evaluation matrix with eight service/price options to compare looking something like this:
|Service||$/annual flat rate||$/stop||$/tonne|
If you receive five RFP supplier submissions addressing each of the eight options, you’ll have 40 price and service options to evaluate, compare and write into a recommendation report for your Council to understand and act upon.
2. Asking for new information to supplement the original bid
Let’s say that Council still wants to include the pricing options above but asks you to add three new service items to the matrix to learn if:
- collection every 2 weeks is more economical
- collection in clear bags is an affordable addition and
- switching depots to front end loader (FEL) bins will generate any savings
The evaluation matrix must now expand as follows:
|Service||$/annual flat rate||$/stop||$/tonne|
|Clear Bags wkly||$||$||$|
|Waste x 2 wks||$||$||$|
|Clear Bags x 2 wks||$||$||$|
|Recycling x 2 wks||$||$||$|
|Depots to FEL bins||$||$||$|
The same five submissions would result in 23 service/price options x 5 suppliers for a total of 115 separate options for evaluation, reporting and explanation to Council.
Too many options can threaten supplier interest
With too many options to analyze, your evaluation team, and later the Council, may be confused and doubt if they understood and compared all the variables correctly. This can all lead to what we call “paralysis by analysis” and a subsequent failure to act.
But worse, suppliers may interpret an RFP containing too many options as a signal that a municipality is not serious about awarding most, or even any, options, i.e. the municipality is only going on a fishing expedition, looking to get a price for all the great services available that they will never buy. It’s always important to remember, that for suppliers, developing a strong RFP submission incurs costs and time. If they believe that most of the service options in an RFP may never be awarded, some suppliers may decline to offer a proposal or have to rush to submit one that is overpriced or ill-conceived. Either way, the municipality loses because of less competition, higher priced options or bids that are too complex to evaluate.
Solutions: Tips & Techniques
- Do your homework first. Call other municipalities and use information in the WDO Datacall to learn the cost of options that you may be seriously considering and to set aside those you are not ready to actually award.
- Make sure your Council understands the challenges inherent in issuing “fishing” RFPs and help them understand how it benefits your program to design RFPs strategically to obtain solutions and pricing for options that are most relevant to your program.
- Limit your RFP options to no more than six and reduce unnecessary variables like pricing all options three different ways.
- Call/email CIF for friendly advice, RFP samples and help when you need it.
For more information contact CIF Staff.