BY WAYNE TUNG | MANAGING DIRECTOR
Imagine this – you’re looking to implement a new software solution and find the right supplier to help make it happen.
First things first, you created the perfect Request for Proposal (RFP). You know that good RFPs lead to better working relationships, which leads to better projects, outcomes, and a fair deal. So, you took the time to document the requirements and scope correctly.
You received multiple bids with fair, competitive prices. You seemingly did everything right up to this point, but somehow negotiations still took too long.
What’s the problem I see again and again here? Many people do not include contract term requirements, such as legal and commercial terms in RFPs. This step is often overlooked since RFPs are mainly focused on requirements and scope. This results in prolonged negotiations or failed deals.
Many people do not include contract term requirements, such as legal and commercial terms in RFPs.
If you want to shorten the negotiation time around RFPs and experience a better rate of success, here are some RFP best practices that are key to success:
- Include your key contract terms in the RFP or a copy of the contract you want the supplier to sign should the supplier win the bid. Key contract terms protect both parties in an equitable way.
- Take advantage of the maximum leverage you have early in the RFP process. We find that suppliers are more “giving” on contractual terms if contract requirements are part of the RFP.
- Do not focus solely on cost. Fair contractual terms around review and acceptance, termination, price changes, and liability are also important and can reduce your risks.
By taking the proactive steps outlined above, you will save yourself time and energy as you begin to review RFPs and finalize negotiations with your chosen supplier(s).
Try it! You will experience shorter negotiations and a better deal!
Good RFPs lead to better working relationships, which leads to better projects, outcomes, and a fair deal.