Rfp Situation Analysis

Executive Summary

The lease agreement on the multi-functional printer in the Design Group will be expired by the end of June. A new lease contract for the replacement printer with the Management Portfolio Service is required to accommodate essential needs for the group. A single stage RFP has been sent to the public market with an outline of the minimum requirements on the printer’s configurations and the evaluation criteria. Eleven proposals were received with a total of eighteen models suggested.

It is by far under-estimated the overhead cost of doing a RFP for such a small project with an estimated annual spending of $6,000. The lack of supplier eligibility assessment had also resulted in the vast market response and large number of proposals received. For case like this, it is more reasonable to conduct a RFQ action instead given the net value of the project. An EOI/RFI can be used at the first place to gather information required for RFQ. It is important to consider the overhead cost as well as total efforts and man power before deciding for bidding actions. A filter should be applied indicates that only the past and current suppliers are eligible for the bid given the measurements in the evaluation criteria.  

Procurement will be working closely with both the end user group and IT group to ensure the punctuality of the timeline. All installations should be completed no later than June 30. A random email survey will be sending to the end users to measure the performance of the printer and service on a timely basis. Quarterly performance reviews will be scheduled with the service provider for suggestions and improvements.

RFP Situation Description

The lease on the multi-functional printer for the Design Group is expiring by the end of June. A replacement printer with MSP (Management Portfolio Service) is required by the group no later than the expiration date. Their current machine Xerox 7232 is offered by Xerox, who has established a well-maintains relationship with the company and has been our primary service provider for the past 10 years. To maintain their current machine by simply renew the contract, the total cost will be $27,009 on a 5 years lease. Due to this high maintenance cost and age of the machine, the group has decided to look for a replacement machine with the similar functionality that offers potential cost savings. A brief configuration of the current 7232 model is listed below

        A single stage RFP (Request for Proposal) is sent for options on a five years lease contract for a replacement machine with the above 3 specifications as the minimum requirements. The evaluation criteria include Price, Machine Functionality, Operational/Technical Support, Company Relation and Company Performance. A mandatory quarterly performance review is also stated in the RFP to ensure the performance of the machine. The closing date of the RFP is set to be May 31 by 2:00 p.m. with the procurement manager as the single point of contact. Eleven proposals were received in total with eighteen different printer models suggested.

RFP Situation Analysis

        RFP is a very complicated bidding process which involved a lot of documentations and man powers. In this situation, the overall cost of the project is only roughly $30,000 in 5 years. That is about $6,000 per year. It is far not worth the efforts to go under a RFP process given the dollar value of the project. With the involvement of the evaluation team and the documents required in the standard RFP procedures, the overhead cost will be high over the value of the project itself. Moreover, the requirement given in the scope of work is too open and there is no method used to filter for supplier eligibility. The market responded vastly which resulted in the large number of proposals received at the end with too many choices. To review and evaluate all proposals as to be fair for all bidders, massive amount of time and efforts will be required which would again added to the overall cost of the RFP.

        It is understandable that the company choose to proceed with a single stage RFP since there is little knowledge about the printer models and performance in the current market. Proposals received will provide sufficient knowledge on the model options. However, both the physical cost and the effort required associated with this bidding process are highly under-estimated. Given the number of proposals received, it is a successful RFP action itself. However, on behalf of the benefit of the company, this is not a successful bidding process.

Conclusions

        In conclusion, even though there is little knowledge on the desired product/service itself, RFP is not always the best bidding action. Information can be obtained with many other methods such as Express of Interest (EOI) and/or Request for Information (RFI) at a much cheaper cost. Before drafting a RFP, overhead cost associated with the action should be considered. The decision to choose the appropriate bidding action should not only rely on the information provided by the action, but more importantly, to count against the net worth of the project itself. Moreover, in case like this, a supplier eligibility filter should be implanted in the proposal to limit the number of bidders in order to reduce the total time and man power spent to evaluate the proposals.