When marketing procurement goes bad
We often get complaints from agencies regarding procurement, but what they don’t realise is that we often go through a tender process in order to assist with running tenders. This may seem a little excessive, but that is how business is going these days, having an RFP process to choose the consultants to run the main RFP process.
This only adds to the frustration I have with the procurement profession and I’m sure many agencies are in the same boat. In saying this there are many people in procurement whom add a lot of value to the process, but too many in the profession slavishly follow process without any thought going to adding value or attaining the best possible outcome.
In two recent cases of tendering we were not successful, but this doesn’t mean we have any ill will. This is because with the first case, we actually withdrew from the process, and with the second we wish we withdrew as we were seeing red flags.
The organisations involved in both of these processes, pledged a high moral standard and integrity as their key values. When in reality the behaviour and practices we encountered during the process fell well short of their pledge. To be completely honest, from our experience, my perception of the two organisations has most definitely been affected for the worse.
Due to confidentiality agreements, I cannot identify the two organisations that we worked with, which works conveniently for them. I completely agree that such confidentiality agreements should be in place, but they should be to protect commercially confidential information, not the subpar work and standards of such organisations.
So what exactly happened in our dealings?
1. Confidentiality Agreements
With both tenders, we were required to sign arduous confidentiality agreements, ranging from 16 to 24 pages in length. I feel strongly about the importance of Non-Disclosure Agreements and Confidentiality Agreements, but only when they are protecting commercially sensitive information. I also feel that they should be easy to understand.
With the agreements we were dealing with, there were numerous clauses, and one even included a clause on Intellectual Property. This clause effectively stated that during the RFP process, any IP that arose would become property of the Party disclosing the confidential information or the client themselves. What made this worse again was that we would also be signing away any existing IP. Needless to say we passed on this.
2. Project Definition
Now that they had the protection of a confidentiality agreement, and the promise of IP without too much work, the organisations obviously did not feel obligated to give a well-defined project definition. There were no provisions of commercially sensitive information. We were left in the dark on agency arrangements, the size of the project or the timeline, yet we were supposed to provide an accurate tender. As for the confidentiality agreement, I couldn’t see the point as we weren’t provided with any information in the RFP that we could not have found out ourselves with a quick Google search or by visiting their website.
I don’t know how they expected us to provide a cost proposal without any of these critical details. And to add further insult to injury our questions were met with…
3. Providing Answers to Questions
Our questions, although not for the want of trying, were completely pointless. Even incredibly simple questions were not answered. Some of my questions to procurement were:
– How many consultants were in the tender process? This was in order to assess our odds of winning the tender.
– What criteria the selection was being based on and what the weighting of such criteria would be. This was so I could configure our response to meet their requirements.
– What the selection process constituted and whether we would be able to meet the client to go over their needs. I wanted to be able to determine whether chemistry was important in their selection process, or whether this process was just seen as a commodity.
All of our questions were refused on the grounds that if these details were not in the procurement guidelines they weren’t necessary for us to know. I don’t understand how they would create guidelines that do not allow the suppliers to measure whether they are right for the project or not. Surely they would want to give the supplier as much information so they could measure their potential return upon participating, and the client could assess probability of the supplier’s success.
I found through my dealings with this type of procurement that the whole process is tarred by a feeling of arrogance, and the idea that suppliers will give up anything and everything to jump at the chance of tendering for their business. Here a problem becomes apparent as the suppliers that are willing to jump through the clients hoops are the very ones who shouldn’t be. Often they are the less capable companies. Surely the client doesn’t want these less capable companies with less chance of success.
4. Time Management
The last straw was the time limit put on us to respond to the RFP’s 69 points. We were given 48 hours, or 96 when you include weekend work. Do they really think that when running a successful business, and juggling overheads and busy schedules, that we have extra staff sitting waiting for RFP’s to come in? That we will dedicate ourselves to showing how perfectly we are aligned with the organisations values?
We made the decision to refuse. But upon notifying them this, we were told that all other suppliers had refused as well and could we give a cost estimation within the next day for their final decision the day after. It did not come the day after, and a full two weeks later we were still waiting for it. We were not surprised as this often happens. Some agencies I have talked to have waited up to 6 months and more for contracts after stopping everything to produce an RFP within a few days for the organisation.
I know that it is not always possible to keep within your time frames and that selection processes can get messy. We have experienced this. But what we do is try to keep everyone in the loop about what is going on to reduce their concerns. When I conversed with procurement on this point, their reply was that their policy is to keep communications at a minimum when regarding an RFP, in order to eliminate compromise.
Suggestions on how to clean up
1. Procurement Guidelines – If you do have guidelines, a good practice would be to go through them and check that they do indeed work towards the best possible outcome both in their application and interpretation. This is especially important in the selection of suppliers as successful collaboration often defines their work.
2. Confidentiality Agreements – These need to be solely for protecting commercially confidential information. Any other clauses are irrelevant and should not be included. To take them a step further, use the agreement to recognise that the supplier also has confidential information and Intellectual Property that needs to be protected.
3. Provision of Information – This needs to be honest and open. Details should be freely provided on the scope, selection criteria, and processes of the project. This gives the potential suppliers the information they require to measure whether they are indeed suitable for the project and whether it matches their interests.
4. Questions – These need to be answered in good time and openly. Any questions on the details of the project should be given answers that are then shared with all other potential suppliers. Although any questions that show the strategic thinking of a candidate, or their own IP, should be regarded as private and only shared if permission is given.
5. Schedule – The schedule needs to be realistic with enough time for each stage in the process. This ensures both parties, the suppliers responding to the RFP and those on the organisation side are clear on the timeframes. If problems with the timeline do arise, all respondents need to be updated on the changes and revised timeline, in order to revise expectations.
Whether the air of arrogance within the procurement process is deliberate or not, I am concerned with its prominence and the subsequent distrust that is created. This is the opposite of the purpose of procurement, which is to create an opportunity for parties to get involved, and that they will be considered justly and in fairness.
What are your thoughts?
If you want some ideas on how to combat the commoditising effects of procurement and the RFP processes, check out this SlideShare presentation I gave to AMSRO last year.