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Should you run a solicitation and selection process
based on a Request for Proposal (RFP) for the first time, you may
find useful, and helpful, having handy a tutorial presenting the standard, formal
procedures to follow or comply with, like:
You may be required, depending on your organization's purchasing policy, to use a formal solicitation and selection process for an acquisition which amount exceeds a certain threshold defined in your procurement policy.
An invitation to bid (ITB) is relevant when you want to pay the lowest price for the same value.
In other words, what is the difference between bid and proposal?
ITB are used when you know exactly what you want and, because there is no or insignificant difference in term of value between the different providers' offerings, you want to pay as less as possible for the acquisition of these goods, product, or services. It's the method of the "lowest price technically acceptable". The ITB-based selection process is the cornerstone of the best price procurement.
A solicitation and selection process based on
a Request for Proposal (RFP) is relevant when you want to
pay the lowest price for the best value.
Given that the value of the different proposals differ, the RFP-based
selection
process seeks a tradeoff between selecting the best of proposed solutions and
minimizing the budget you are willing to spend in order to maximize
expected benefits. Does it remind you the saying "As you sow,
so shall you reap"?
To
achieve the goal of computing such a benefits/costs ratio, a mathematical method called
Analytical
Hierarchy Process (AHP) is commonly used. This method relies
on building a
decision matrix by using the
S.T.A.R.S.
formula:
Specify your needs, them prioritize them;
Translate them into a decision model under the form of a set of criteria organized within a decision hierarchy, then assign them a weight based on their relative importance in the final decision;
Analyze, compare, and challenge alternatives with mathematical models (rate, score, and sort; sensitivity analysis, robustness, etc.);
Rank alternatives based on their ratio of adequacy to the decision model
Select the alternative offering the best value at the lowest cost.
The RFP-based selection process is the cornerstone of the best value procurement.
The purpose of a formal solicitation and selection process is to get the best value at the best price by having providers competing against each others, and to avoid, as a by-product, favoritism, or any other bias, by using formal procedures ensuring an accurate, relevant, well-documented, thus auditable final decision. Before entering the solicitation and selection cycle, you have no choice but getting approval from your upper management, and requesting for legal and financial counsels, whether internal or external.
Here is an outline of the procedures inherent to a formal solicitation and selection process:
WANT TEMPLATES AND
SAMPLES
FOR PROFESSIONAL RFP LETTERS?
Learn tips on how to write a professional, very impressive, and bullet-proof RFP letters in our FREE
RFP Letters Toolkit, 2009 Edition.
You will find in it lots of templates and samples of professional RFP letters.
It's FREE!
"No doubt that these letters save time"
- Pascal PERRY
Hendrix-Barnhill Company, Inc.
Requesting bids for labor & materials for the Town of Clayton East Clayton Industrial Area Force Main Phase II project. Job includes pipe laying, erosion control, seeding, hauling and pavement repairs..
Flintco Inc
Flintco will accept bids on the New Air Traffic Control Tower at Memphis Int'l Airport on 09-07-07 by 12:00 pm CDT.We are an EOE.We encourage & invite bid from all eligible business enterprises, WBE, MBE, SDB, SBE, HBE companies.Fax bids to 901-372-8989..
Chemonics International
Chemonics International, acting on behalf of the USAID-funded Egypt LIFE Red Sea project, is soliciting offers for the supply of one US-made truck tractor with water tank semi trailer unit for use in Egypt. Contact jandersen@chemonics.com for more info..
WATTS CONSTRUCTORS, LLC
CONSTRUCT COMM CNTR, NCTAMS, Oahu, HI - Constr new 1-story bldg. Concrete, structural steel, OWSJ, roofing, EIFS, site work, fencing, landscaping, exterior work, interior const & finishes, security vault door, blast doors and windows, elect & mech..
C Construction Co., Inc.
Contractor soliciting bids for Renovate and Repair, Hangar 131S, MCAS, Cherry Point, NC. For any and all qualified Subcontractors and Suppliers, 8A, SBE, WBE, Large Enterprises, etc. We are an Equal Opportunity & Affirmative Action Employer..
C Construction Co., Inc.
Contractor soliciting bids for Interior Repairs and Renovations to Roadhouse, B3452, MCAS, Cherry Point, NC. For any and all qualified Subs/Suppliers SBE, 8A WBE, Large Enterprises, etc. We are an Equal Opportunity & Affirmative Action Employer..
Hawaiian Dredging Construction Company, Inc.
Drydock No. l Repair Wall Leaks and Deteriorated Concrete on Walls at PHNSY & IMP, Pearl Harbor, Hawaii,WR# 151065.
Kukurin Contracting Inc.
KCI seeks quotes from all interested mbe/wbe/dbe suppliers for the following construction materials & services: PVC Sanitary Sewer Pipe (8", 4" and 2� diameter), 4 ft. diameter manholes, aggregates, hot asphalt & portable toilet service..
Carl Belt, Incorporated
STONEY RUN SANITARY SEWER SYSTEM-Sanitary sewer extension including gravity & pressure mains, manholes, grinder pump station, house connections, traffic control, erosion & sediment control, site restoration... Get more info @ ftp://ftp.thebeltgroup.com.
Chemonics International
Chemonics International, acting on behalf of the Zambia Threshold Project, is soliciting offers for the supply and installation of file compactors in Zambia. Contact rkeating@zambiathreshold.org for copy of the RFP and information..
Last Modified: Monday, August 17, 2009 12:27:17 PM
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