Request for proposals (RFP) and request for quotations (RFQ) help to identify consultants and contractors who have the capability and interest to support a project. A statement of work (SOW) or master service agreement (MSA) can better define the detailed terms of the relationship. These are legal agreements and you should work closely with your attorney.
- Investigating your options, involves looking at the best ways to get things done. And sometimes, as a project leader, this means getting help from other companies. In this video, we'll walk through the steps in the request for proposal process and see how to find the right partners, and engage them correctly. But first, I'd like to describe how we solve a problem that comes up in our home every night. What's for supper? My wife and I will ask our kids what would you like to eat? The kids are kind of predictable.
Pizza, spaghetti, and mac and cheese are usually their proposals. We evaluate each idea from several angles. How nutritious are they? How much time would they take? Do we have the right ingredients? Then, we make a decision, and we start cooking together. Even after we make the decision, there are usually a few details to negotiate. Mushrooms, or no mushrooms on the pizza. Elbow macaroni, or curly noodles for the mac and cheese.
These details are important, too. Because they all impact the quality of the final solution. Believe it or not, hiring an outside vendor for your project follows about the same pattern. It's basically a two-step process. The first step is when you invite firms to bid on the work. Basically, asking the question What should we have for dinner? This is called a request for proposals, RFP, or a request for quotations, RFQ.
You're telling prospective bidders about the project, and what you'll be expecting from them. Your goal is to give them enough information so they can provide you with a realistic proposal for how they can help. Firms who receive the RFP, then decide whether they're interested, and respond with a proposal that highlights their qualifications for doing the work, and the amount that they would charge. Once you receive all of the proposals, you can decide which firms you're most interested in working with.
Even if you choose to accept a proposal, in other words, you decide what you're gonna have for dinner, you may still need to provide additional details about the project, and how you're going to manage the relationships. Should we add mushrooms to the pizza, for example. Well, these details can be added in a statement of work, or for more complicated projects as part of a master services agreement. An MSA lays out the general terms of the relationship, and as you identify specific services you need performed you can add the details as sub-agreements.
Each of these sub-agreements is basically a separate statement of work. Engaging vendors can sound like a complicated alphabet soup of terms, but once you understand the process, it's actually fairly simple. But if you are going to engage an outside vendor, it's important to work with an attorney to assure that the agreements are written in a way that meets your needs. Getting great results from consultants and contractors comes from having a clear and common understanding at the outset about what you are both expecting to happen.
And how you'll negotiate changes when necessary. Managing this process well will help you, and your team, be more successful.
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