Friday, April 8, 2011
Communicating in the Bid or Proposals Stage
The Invitation for Bid, Request for Proposal or Request for Quote is just another step in the negotiation communication process. Each document must provide the Supplier with the understanding of what you want. Sometimes you may not be totally clear in what you want or can afford, so you may identify specific alternatives or options you want them to bid on or, you may allow them to provide options or alternatives of their own.
You use these documents to do several things.
· First you want to set their expectations. They may have formed their own expectations during their prospecting stage, which need to be reset and these documents are the best alternative for providing them with an understanding of what is important to you. The sooner you can begin to set their expectations or break down expectations that they may have formed from their prior discussions with people from your company, the better off you are. Having it printed in black and white provides the authority of writing. This is your company’s formal position.
· You also use the documents as a mean of setting the benchmark or anchor for the negotiations. When they provide a bid or proposal based on these documents you need to hold them to it. If they come in at a later date and want to make changes, you use these documents to either hold them to their initial proposal or to extract concessions from them in return for the concessions they are seeking from you.
It is very important in any specifications that are provided, those specifications must be written in a manner that also sets the right expectations. Anything in the specification that would effectively restrict or limit the competition would eliminate your power of competition. You don’t want to give that up before you have started. One approach is to include the words “or equal”. This only works if what they are referring to really does in fact have other competitors that produce equal products. If they don’t, the language is ineffective. The best way is to write the basic specification in a manner which broadens the potential competitive base by having certain required areas of functionality which the broad base can supply and allows optional or alternative functionality with the decision criteria being based on the best value (a combination of functionality and price).