2014 Government Regulations & Business Summit
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“They get bids for everything and always take the lowest bid.”
“They send out an RFP and I can never speak to the decision-maker.”
“We’re becoming a commodity. All they do is take the lowest bid.”
“It’s the government. They have to take the lowest bid.”
Many companies have become smart buyers, but many have become too smart. They’ve refined the buying process so far that they have precluded the words “quality” and “value” from the buying process AND they have taken the words productivity, ease of use and morale out of the delivery process.
The typical request for proposal (RFP) has a bunch of standards about what has to be offered by the vendor, but far too little (or nothing) about what happens after the company takes ownership. They have the “specs” in the RFP, but not the details of use, value, productivity or morale.
The major flaw with the RFP process is that the people conducting the bidding are not the people who use the product or service once the bidding is complete. Nor, for the most part, do they care.
The main goal of bidding is NOT to get the best product. The main goal of bidding is get the cheapest price. And oftentimes that precludes the best product. It also lowers the profit of the company doing the bidding. Long-term, this is not good for the survival of a company.
REALITY: “The customer took the lowest bid” is as bogus as “the dog ate my homework.” The fact is you let the customer control the selling/buying process. Not good.
REALITY: If you follow the customer’s RFP requirements you will lose even if you win. If you win, it’s likely you did at a severe reduction of price and loss of profit. Not good.
That’s the bad news. Let me give you the good news, and the sales news.
There are several strategies you can employ to get around the bidding process, or legally and ethically change the bidding process. Here are some ideas you can begin to use immediately:
1. Ask for a clause to be put into the RFP that states all claims must be backed up with customer testimonial videos as proof. Any procurement department should be happy to add this clause into their bidding process. It will assure them that everything being claimed will come to pass. This will also help in establishing the reality of installation, ease-of-use and long-term serviceability.