How Do I Decide Whether or Not to Respond to Requests for Proposals (RFPs)?
I know some energy and sustainability consulting organizations who seem to do quite well out of RFPs. I also know more, like mine, who have a love / hate relationship with them. I'm not suggesting anyone's right or wrong here, but from my (somewhat cynical) experience with them, here are a couple of scenarios to set the scene:
- Business is going well. You’re working for a couple of clients, and in a week or two another project is due to kick off. And of course you’re allocating time to bringing in future business. Then an RFP from a large government organization appears in your in-box. Intrigued by the title, you read all fifty-six pages of it and feel it’s tailor-made for you. The deadline is in three weeks, so you stop what you’re doing and spend much of the next three weeks sorting out partners, agreeing on fee rates, working out hours, and writing what turns out to be a large document. You pay for four bound copies as specified and a courier to make sure it gets there on time. Three weeks later, you’re told you’ve made the final three and are asked to give a presentation on a certain day. More work, but you’re encouraged to have got this far. You put in the time and effort to make the presentation really slick. You and your partners do a good job but end up coming in second. Despite a follow-up feedback session, you never really find out why.
- Same scenario, but you do a little research online and find out that twenty-three consulting organizations have downloaded the RFP. Not liking those odds, even though you think you have all the qualifications required, you choose to pass this time.
- You’ve been unsuccessful with the last six RFPs you submitted, and you think the problem is mainly cost. This time you price extremely competitively and are successful (at last). So you do the work, and when it’s over you do some evaluation and realize you worked at 65 percent of your normal fee rate.
As you might have gathered, I have a few problems with RFPs. In short, I’ve wasted far too much time in my career responding to RFPs, so now I'm extremely selective regarding the ones I choose to bid for. In many cases, I believe they’re not an efficient way to win consulting work, for the following reasons:
You never know if the playing field is even or not. Many organizations have internal rules that compel them to issue an RFP for a project above a certain value, often as low as $10,000. Particularly for the smaller jobs, the issuer may already have a preferred company in mind, and the RFP is just an exercise to comply with the rules. Numerous other factors can make the field uneven, and it’s very hard to know if you have any chance at all.
The odds aren’t good. Typically you may be competing with ten other companies, often more. Okay, they may not all have your skill sets, but they may have some angle you don’t have. Again, you just never know.
Sometimes a company is desperate for work and will “buy” the project—that is, they’ll lowball their offer just so they have some cash coming in and something on the company résumé.
An RFP appears when it appears, coupled with a deadline. It forces you to find the time you need to complete it in a specific period, which often necessitates delaying fee-paying work or marketing actions.
You must make up your own mind regarding each RFP that comes out, but you probably have the gist of my feelings about them from the last few paragraphs. However, there’s an exception to the rule of being extremely selective. If another (preferably larger) consulting company asks you to subcontract for them on an RFP submission, That is a separate matter. This means that the other company does most of the heavy lifting in terms of preparing the RFP, and probably all you need to do is submit a résumé and a small amount of script. I once obtained $50,000 of work in this way for an effort on the RFP that took me less than two hours. If only that happened all the time...
As a highly experienced energy and sustainability consultant, engineer and author of “Consulting Made Easy”, Adrian assists consultants, or would be consultants, to achieve success on their terms in their own consulting businesses. Adrian helps consultants increase their fee rates, find more clients, have more free time and have more fun.
Contact Adrian at email@example.com to learn more or to set up a free half hour consultation to help you transform your business.
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