We recently had an experience that doesn’t happen all the time – we decided not to submit a proposal in response to an RFP that we received. Sounds crazy to turn down the opportunity for work, but it really isn’t. We (and I’m sure others) do it more than you might think, though not often.
Deciding which opportunities are right for your company is one of the most important things you can learn to do in business. Indiscriminately chasing every lead or potential client isn’t a smart idea; sometimes it means you lose money on the job or that you’re trying to deliver services outside of your true area of expertise. Understanding what your criteria are for working with particular clients is just as important as understanding their needs. Only then can you hope to achieve a truly successful business relationship for both parties. I covered this topic in part in a column last year: True Partnerships are a Must for Successful Staffing Providers.
Once you’ve made the decision not to propose, what should you do? Well you certainly don’t ignore the RFP entirely or “circular file” it in the trash. Every request deserves an answer and at the very least, you should respond with a polite “no, thank you.” Generally, though, we try to explain some of why we think we’re not a good fit and have chosen to decline and I think this is a best practice, where possible. Aside from being polite and good business, I think it is a good opportunity to educate and be sure the company is aware of what they are asking for and how it is perceived by potential staffing partners. It is not for me to decide how you might want to structure your program, set your rates, or develop your procedures and requirements for your vendors, but I do want to make you aware if those are the reasons we have chosen not to respond.
For example, if we get a request to provide an on-site resource to help manage 5 or 10, even 20 consultants – that would give us pause. Generally it is not necessary to be on site for that number of people; we would definitely recommend it once you start getting closer to 100 and certainly for 100+. In the IT world this is particularly true since those consultants tend to need less instruction, onboarding, and ongoing support. Asking for this drives up the cost and either the client pays more than they need to or the supplier loses money. A client may simply think it sounds like a good idea or is a necessary component of any good program and may not understand that they don’t really need this resource or that this is why vendors are opting out.
When an RFP indicates that there will be a reverse auction process involved, we usually decline the opportunity. In our experience and opinion, the reverse auction can work in situations where commodity-like goods or services are being purchased, but is not successful in pricing contingent labor. People are not commodities and market rates fluctuate within industries and specialties. IT, engineering, and scientific consultants are some of the most well-trained and educated consultants, and trying to lock in the lowest bid through an auction will almost always mean sacrificing quality on the part of the company and any chance at a profit on the part of the vendor. More than 25 years of experience has shown that it doesn’t work in our industry and so we’ve learned not to propose. (I’ve discussed reverse auctions before, and when that’s the reason we decline to propose we usually inform the company.)
Again, it is everyone’s prerogative to make their own decisions about how to run their program and I am not implying that anything nefarious is going on. Sometimes it’s as simple as a company that is not looking for technical consultants, our sweet spot, or where their primary needs are somewhere overseas that we do not fully support. It is simply a case of recognizing where your firm and the potential client do or don’t match up in terms of the services required and the conditions of delivery.
I think it is a sign of intelligence, experience, and business savvy to decline opportunities that are just not right for us. It’s important, though, to do so in a professional manner and, I hope, in a way that helps them understand why we declined. Nothing personal, just good business.