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Right Vendor, Right Price

Economic uncertainty has driven most associations to embrace the mantra “do more with less,” which makes this the perfect time to re-evaluate vendor relationships and ensure that you are getting the best, at the best value. The best way I’ve found to select the right service vendor is through the request for proposal (RFP) process. Although it is most often associated with government procurement procedures, don’t let the idea of an RFP put you off. Used for virtually any service or project—from photo-copier maintenance or accounting to event planning or public relations campaigns—RFPs can help associations of any size evaluate vendors locally and nationally without a lot of legwork.

Best utilized for long-term or high-cost projects due to the amount of time spent reviewing vendor submissions, RFPs can also help you, and perhaps your committee or board of directors: a) clearly identify why you need outside help and b) determine for which tasks the vendor will be responsible. Distinguishing these two key points is the best place to start when writing the actual RFP, which may be as short as one page or as long as several detailed pages.

The basic structure outlined below is a good starting point for associations considering the RFP process. Depending on the project, additional components can be added as needed.

Purpose
Usually only a sentence or two, this opening explicitly states why you are issuing the RFP. Example: “The purpose of this request for proposal (RFP) is to solicit proposals for an agency to assist the ABC Association in developing and implementing a public Web site.”

About Your Association
Some of the prospects on your vendor list may not be familiar with your mission or key constituent base. Write a concise paragraph explaining what your organization does.

Background
This section should give vendors some insight into why you need help. For example, an RFP for trade show booth fabrication would describe what trade shows you attend, what functions your booth currently serves, and how the new exhibit will be used.

Objective
One of the most important parts of the RFP, this section details what you are trying to accomplish. The more specifically and accurately you describe the goals for the project as well as the -expected outcomes, the more likely you’ll find a -vendor who can make it to the finish line.

Scope of Work
This key section details the exact services you want the vendor to provide. As with the objective, be as specific as possible when detailing the tasks you expect the vendor to complete. Understand, though, that the scope of work can be adjusted once you select a vendor and begin to truly define the project. Any changes in goal or tactics can be handled when negotiating the contract.

Budget
Most organizations do not want to cover finances in an RFP. However, unless the purpose of the RFP is to select an ongoing vendor, such as an accountant or maintenance service provider (who will furnish a price list), you probably should include a budget section. For vendors working on a project basis, it will be virtually impossible to give you an accurate proposal without some idea of the budgetary framework. Even if you have to be vague about the overall budget, include a general number. The more accurate the proposal, the less work you’ll have to do defining the project after the vendor is hired.
Time frame
Vendors like to know if they are being considered for a yearly contract or on a short-term basis. You should also give the respondents an indication as to how soon you would need the work to be completed. If you want a Web site in six months, say so. Vendors who can’t accommodate that sort of workload will save your time and theirs by failing to respond, instead of failing to deliver.

Proposal Requirements
In this section, list all of the information you want vendors to provide in their proposals. The list frequently includes: description of company, services offered, pricing, references, demonstration of ability to perform work, bios of key team members, any conflicts of interest, and proposed time frame for completing work. As a guide for the vendors responding to your RFP, this list ensures you will be able to compare apples to apples.

Submission Process
The last item in every RFP describes your process for reviewing and selecting a vendor. If you know the deciding body won’t be evaluating the responses for a month, it’s helpful to share this information. Will you be paring down the list and inviting several vendors to give a presentation? When will vendors be notified of their proposal’s status? The more information you include, the fewer phone calls you’ll have to field.

Once the RFP is complete, you can send it to the vendors you have identified, including service providers with whom you have previously worked. Even if you have a good relationship with a current or past vendor, the company will most likely not mind the opportunity to submit a proposal, with the understanding that financial considerations require you to evaluate all of your options from time to time.

The number of vendors you solicit depends on how many options you want to consider and -
whether you have already identified several viable prospects. In certain cases, a large number of proposals may be just what you are looking for, especially if your association has never hired a vendor for these services before. Ultimately, there is no right number of RFPs to send. Remember, though, that the more people you solicit, the more proposals you will have to review, taking up valuable time. Of course, some of the vendors on your list simply won’t respond. Don’t worry; this is part of the -beauty of explicitly outlining your expectations—people who can’t, or don’t care to, meet them won’t waste their time or yours.

Give vendors at least three weeks to respond to small projects and six weeks for larger ones. Crafting a proposal is extremely labor intensive if it’s done right. If you make vendors rush, you won’t get the quality you’re seeking.

The manner in which you evaluate the proposals and select a vendor will vary depending on the type of RFP and the organization’s normal approval methods. Though a somewhat rigorous endeavor for both the association and the vendors, the RFP process can be the start of a long and lasting relationship, which is well worthwhile.

Next Step: The Contract
If you’ve sent potential vendors an RFP that clearly explains your expectations and requirements, you’re halfway home—not only in drafting a good contract, but also in effectively negotiating with your vendor. Entering into vendor contracts that provide appropriate protection for your association and reflect your association’s business strategy is the next critical step after selecting a vendor. Read more about how to write successful vendor contracts in “Painless Vendor Contracts, How your lawyer can help you write successful contracts,” by Nan Roytberg, NAR Legal Affairs. Access at REALTOR.org/eomag.nsf
/pages/LegalUpdateFA01

Amanda J. Sacco, RCE, e-PRO, is the director of communications for the New Jersey Association of REALTORS®. She can be reached at 732/494-4705 or asacco@njar.com.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.

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