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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
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
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, 2014 Edition.
You will find in it lots of templates and samples of professional RFP letters.
"No doubt that these letters save time"
- Pascal PERRY
POGO Urges OSTP to Ensure that Agency Scientific Integrity Plans Include Contractors and Grantees
POGO is pleased to see that most federal departments and agencies have finally made public their draft or final scientific integrity plans in response to President Obama's March 2009 Memorandum on Scientific Integrity. However, POGO is concerned that several agencies have not included contractors or grantees in their plans. The failure to ensure the integrity of science performed outside the government but funded with taxpayer dollars is particularly troubling given that some of these departments or agencies—such as the Department of Energy (DOE)—rely heavily or nearly entirely on contractors and grantees for scientific research. .
14 Federal Agencies Fail to Fulfill the President's Directive: Billions in Taxpayer-Funded Science Not Included in Integrity Plans and Policies
The Department of Energy (DOE) and the Food and Drug Administration were two of 14 federal agencies that failed to set proper scientific standards for contract and grantee researchers, despite the fact that tens of billions of dollars in taxpayer money funds this science each year, the Project On Government Oversight (POGO) said in a letter sent today to the Obama administration..
POGO Supports DoD Effort to Redefine Commercial Items
The Project On Government Oversight (POGO) urges you to support the Department of Defense's (DoD) legislative proposal for the National Defense Authorization Act that will result in improved oversight of billions of dollars' worth of so-called "commercial" goods and services..
POGO Supports Proposed Defense Contractor Crime Reporting Rule
The Department of Defense (DoD) seeks input on a proposal to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to expand coverage on contractor requirements and responsibilities with regard to the reporting of crimes committed by or against contractor personnel. .
POGO's Response to Professional Services Council Letter Regarding Reducing Civilian Workforce
Senators and Representatives recently received a letter from the Professional Services Council (PSC) responding to their letters to Secretary of Defense Leon Panetta, in they criticized the Department of Defense's (DoD) efficiency initiative, which aims to reduce costs by scaling back the civilian workforce to 2010 levels rather than compliance with mandates to reduce reliance upon contractors. We would like to offer some perspective on a number of points raised in the PSC letter..
POGO and Partners Strongly Support Passage of the DATA Act
We, the undersigned organizations, are writing in strong support of the Digital Accountability and Transparency Act (DATA Act), H.R. 2146, which is planned for a floor vote this Wednesday. The DATA Act is an important step towards improving federal financial transparency and would empower the public to better understand how their federal dollars are being spent. .
A Test Case on Sanctions?
If there's one thing most Americans support in foreign policy, it's sanctions against Iran to halt its alleged drive for nuclear weapons. From President Obama to Mitt Romney, Rick Santorum, and Newt Gingrich, leading candidates all want to put the economic squeeze on Tehran and to signal their support for Israel. President Obama recently announced he will ratchet up sanctions on the country's oil exports and declared a "national emergency" to deal with the Islamic Republic. The Senate will try to iron out its differences over anti-Iran measures in coming weeks, as bus stations around Washington, DC, are studded with advertisements questioning the President's resolve on the issue..
U.S. Wasting Billions on Over-Priced Service Contracts; Government Lacks Data to Make Informed Contracting Decisions, POGO Tells Congressional Subcommittee
The federal government more than doubled its spending on service contracts over the last decade, despite having inaccurate data on the "true" cost of those contracts—largely because of the misguided notion that outsourcing is more cost effective than using federal workers, the Project On Government Oversight (POGO) told a Senate subcommittee today..
POGO's Scott Amey testimony on "Contractors: How Much Are They Costing the Government?"
I want to thank Chairman McCaskill, Ranking Member Portman, and the Subcommittee for asking the Project On Government Oversight (POGO to submit written testimony about the important, but often ignored, issue of service contracting costs. Although there are many initiatives in place to cut federal agency spending and reduce the costs associated with the federal workforce, the cost of contractor services has escaped scrutiny. Such avoidance is extremely disturbing because the government annually spends more taxpayer dollars on contractor services than it spends on goods, over $320 billion and $210 billion in FY 2011, respectively. To put that level of spending in perspective, total contract spending was $205 billion in FY 2000, of which services accounted for $128 billion of the total..
Last Modified: Tuesday, August 28, 2012 9:25:11 PM