One method of procurement of both products and services is through a bidding process. Responding to a bid, especially for fi rst-timers, can be an intimidating, time-consuming and stressful experience. A starting point is to understand some key documents that have a place in the procurement process. Some are used at the start of the process when the purchaser is researching. Others are used once needs are determined and viable bidders are determined. Suki Mhay and Calum Coburn with Th e Negotiation Experts (www.negotiations.com/ training) off er these explanations of the key procurement documents (solicitations): Request for Information (RFI) – As the name suggests, this is an open solicitation sent to a broad base of potential suppliers. Its purpose is to gather information to help decide the next steps in the procurement process and/or to build a database of possible suppliers. Expression of Interest (EOI) – Similar to an RFI, this, too, is done early on in the procurement process to assess industry interest and to gather additional information. Request for Quotation (RFQ) – Th is is a solicitation sent to potential suppliers containing in exacting detail a list or description of all relevant parameters of the intended purchase. RFQs are intended to make the suppliers’ quotes comparable before negotiations begin. Request for Tender (RFT) – Th is is an open invitation for potential suppliers to respond to a defi ned need for goods or services. Th e RFT usually requests information required from an RFI. Request for Proposal (RFP) – Th is is a solicitation sent to communicate requirements and to solicit proposals from potential suppliers with whom a relationship or partnership is being considered. “Typically, the RFP leaves all or part of the precise structure and format of the response to the discretion of the suppliers,” Coburn and Mhay note. “In fact, the creativity and innovation that suppliers choose to build into their proposals may be used to distinguish one from another.” Light Duty | Fleets are starting to take advantage of cooperative procurement. Most often used by governmental entities, it allows a group of buyers to pool their buying power to negotiate more favorable pricing on goods and services, plus reduce the costs involved in the bid process. Photo courtesy of Ford Motor Company Strategic sourcing to maximize buying power Cooperative procurement is a method of acquiring products and services that offers organizations opportunities to not only save money, but gain operating effi ciencies. This is achieved by “piggybacking” on the bidding process. The technique, a form of strategic sourcing, combines the spend of several organizations with competitively sourced suppliers to reduce procurement costs. Most often, cooperative procurement is used by governmental entities because they are required to follow laws mandating competitive bidding for purchases above certain thresholds, says Steve Perlstein, sales and marketing manager, Mohawk Lifts (www.mohawklifts.com), a lift technology provider that offers environmentally safe, above-ground garage lifts ranging from 6,000-lb to 240,000-lb capacities and lift accessories. Cooperative procurement enables the use of a buying contract by more than one government agency, he explains. Typically, larger agencies act as a lead public body and all participating government agencies realize reduced transaction and administrative costs, workload and processing time. GREATER RETURN With the large aggregate volume represented by the potential users, cooperative procurement contracts also provide the Invitation for Bid (IFB) – Th is is a formal competitive method of awarding a procurement contract. Sometimes referred to as a sealed bid, it is used when there is no substantive diff erence among the products or services that meet the specifi cations and parameters of the intended purchase so that the only diff erentiator among bidders is price. More detailed explanations of these terms can be found at: www.negotiations.com/articles/ procurement-terms/. purchasers a greater return for their expenditure because products and service arrangements are at competitive, “most favored” prices. Fleets and repair shops have begun getting involved with cooperative procurement as an approach to purchasing vehicles as well as maintenance and shop equipment, notes Perlstein. The leverage that comes from consolidating their procurement needs and group purchasing provides cost savings by lowering the total cost of procurement from a bid process. This includes expenses, along with the man-hours, required for writing specs, going to bid and overcoming bid objections. SPECIFIC INFORMATION In order to prepare a winning RFP, it is essential that information is in precise accordance with the outlined requirements. All requested information should be provided and done so in the order and format specifi ed. Begin the process by writing a proposal outline, written in as much detail as possible. Do so by keeping the customer in mind, says Richard White, president, Fedmarket (www.fedmarket. com), a resource that helps companies sell to the federal government. “Write the proposal to solve the customer’s problems as they perceive them, not how you DON’T TRY to think for the customer. Continued page 26 VehicleServicePros.com ❚ JUNE 2016 ❚ FLEET MAINTENANCE 25
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