Using a formal RFP in the procurement process can offer substantial benefits. Buyers can outline in detail exactly what they need, which helps vendors understand these needs and respond.

Sometimes, however, the RFP process can become bogged down in unnecessary detail, and suppliers can become confused about the product the buyer desires. It can also become a simple chase for dollars, as the quest for true value becomes a mere price list.

If the RFP becomes the be-all and end-all of the process of contracting for fleet services, much valuable information and interaction can be lost. If used as one of many tools available to a fleet manager to ultimately choose a vendor, it can be an invaluable aid in the process.

A company seeks information on potential vendors for a number of reasons: to seek better vendor performance, fulfill a company-mandated bid process, or simply “fish” for a better deal.

Among these and other reasons, the first two are legitimate; one seeks operational improvement, the other is generally out of the fleet manager’s control. “Fishing” expeditions, however, can be a colossal waste of time and money, both for the vendors who make the effort to respond, as well as the fleet manager, whose time is doubtlessly better spend elsewhere.

When a fleet really desires to award its business to a new provider, the first step in the RFP process is to determine which vendors are capable of providing the service. Most fleet managers are well informed of the selection of available providers. If the fleet manager keeps a file of vendor material gathered from casual contact, the list of potential vendors is ready.

Once the list of potential bidders is established, contact should be made with each. One method of making such contact can be a “request for information” (RFI), where the buyer first notifies vendors what product or service is needed, asks if they are interested in bidding for the business, and finally obtaining basic vendor information (corporate headquarters, how long they’ve been in business, financial information, etc.). The request can be in hard copy (mailed) or electronic (an emailed Word document to be completed). Whatever form is taken, make certain a deadline is given for responses.

Basic fairness to all vendors also requires a clear statement regarding the reason for the request. That is, if the purpose is the aforementioned ‘”fishing,” indicate so. Vendors who prefer not to commit the time and expense of preparing a response can decline. Finally, new business competition in the fleet industry is keen, and almost certainly, a bid at least competitive with (if not better than) any existing program will be received. Assure potential bidders that the provider who wins the bid will indeed be awarded the business.

Content included in a RFP document and how it is put together can go a long way toward making the process more efficient and effective.

More and more, some level of participation by the company purchasing or procurement function is required in the search for fleet management products and services. This involvement can be both a blessing as well as a curse, depending on the level of participation, the authority the purchasing function carries, and how well the parties understand the product being sought.

One result of involving purchasing in the process is the mandatory inclusion of so-called “boilerplate” language in all RFPs. This language can be limited to a single page or can encompass dozens of pages. There is nothing wrong with a lengthy document; indeed, it can make clear the terms and conditions under which the RFP will be analyzed, including important confidentiality agreements, of great interest to any bidder. The difficulty arises when the purchasing boilerplate is “mixed-in” with the RFP itself, causing confusion and lengthening the time it takes to prepare a response.

Whenever possible, standard purchasing language unrelated to the specifics of the fleet program/product sought should be segregated and clearly marked. “Corporate Procurement Terms and Conditions,” as opposed to “Fleet Maintenance Management Program RFP” will enable responding vendors to work concurrently on both, as their legal department reviews the terms and the sales and service departments can concentrate on the nuts and bolts of their response. Indeed, such a boilerplate can even be sent separately, prior to the RFP itself, so that any legal issues can be dealt with early, and both buyer and seller can concentrate on the program response.

What of the RFP? What kind of information should be requested, and in what form? Two words should be kept at the forefront throughout the process: specificity and simplicity. For example, when a new supplier is sought for an existing program, the fleet manager should know exactly what he or she is looking for, whether a product or feature they’ve already got or something they want, but haven’t been able to obtain.

Using a maintenance management example, one key component of a successful program is reporting capability, that is, how information generated by the maintenance and repair process can be viewed and analyzed. Rather than asking respondents to merely describe, in general, what kinds of reporting or data mining their program can provide, a fleet manager can describe in detail exactly what kinds of report formats are required, i.e. “Does your program provide the following reports?", followed by a list of specifics. This list would include reports the fleet manager already has and has found useful, as well as formats that he or she would like to see but cannot access.

Merely asking what the responder can provide, rather than what the fleet manager wishes to see, forces the fleet manager to wade through far more information than necessary. A concluding request, such as “Provide any other reports or report formats that your customers have found to be useful,” offers the opportunity to review report possibilities the fleet manager may not have considered, while separating the “wheat from the chaff” in the analysis.

All fleet program RFPs should include requests for basic information on the bidder programs:

• Data. What form the expense or program data will take, how it is accessed, and who will own it?
  

• Service. What levels of service will be provided to drivers, fleet staff on a day-to-day basis, and the fleet manager on a strategic level, including program reviews?
  

• Implementation. Describe the step-by-step implementation process, from contract signing to program rollout.
  

• Financial. What are the payment terms, and what, if any, are the incentives for prompt or early payment?

  Pricing for fleet programs takes many forms. For example, if the fleet has been charged for maintenance management in the past on a per-vehicle, per-month basis and prefers this method, the RFP should indicate so and require that the response reflect this arrangement. Pricing should take no more than a single page, perhaps two, for a leasing program bid response (capitalization schedules can be relatively lengthy). Specifying the pricing form will simplify analysis as well as make certain all responses are reviewed on an “apples-to-apples” basis.

  All in all, “This is what I want. Can you provide it?” is a far better RFP form than “Tell me what you can provide.”

  Technology has enabled fleet managers to create the RFP in an electronic document and communicate via email, rather than the exchange of voluminous proposal books and paper as in the past. Most respondents also have electronic marketing material (pdf files, Word documents, PowerPoint, etc.), which can be attached separately to the responding e-mail.

  Finally, the document should include a service level requirement, so the fleet manger’s expectations become part of the contract. Details may be worked out during contract negotiations. In that case, simply notify all bidders if they are awarded the business, they will be expected to negotiate service levels, clearly defined and measurable for review on a regular timetable (once per year of the contract at least), and that failure to meet outlined goals carries consequences.

  Online RFP Gaining Popularity

  
  Another, newer RFP form, one gaining in popularity, is the online bid. Any one of a number of formal online systems can be used to post the bid requirements and gather responses. Fleet managers seeking bids for often-complex service programs should be cautious, however, when using these systems.

  Most online bidding systems were originally developed to purchase particular items: parts, supplies, etc. using them to purchase a leasing program, for example, has its disadvantages. Online RFP systems tend not to accommodate the simple entry of service pricing, i.e., they often ask for a “price” for a “quantity” of a good. A fleet leasing bid comprises several components, including interest rate, administrative fees, capitalization schedules, and amortization, which do not generally fit well into the “pricing” section of many online bidding systems. The result is that bidders must attach documents to their responses. If online bidding for fleet business is to become an improvement over other methods, it must provide for attachments, effectively separating various portions of the bids.

  Conducting the Review

  
  Once responses have been received, the next step is to analyze them in light of the requirements set forth in the RFP. If the fleet manager has been specific in the request, the job will proceed relatively smoothly.

  The criteria by which responses are judged and the business awarded should have been finalized prior to distributing the RFP. The fleet manager must ask several questions in developing these criteria, so that the decision is sound.

  Why is the company issuing the RFP? If because an intractable problem has occurred with the existing vendor, the bid winner must document how they will avoid the problem. If the company believes it can obtain more advantageous pricing, that criteria determines the winner. Other needs, such as technology, service levels, and data mining should be considered and scored overall according to the level of importance they take.

  Other than pricing, the decision criteria must be measured or rated. Prior to issuing the RFP, such measurements must be outlined. Whether by a complex matrix or a simple numerical rating, documenting the rating criteria helps the analysis and decision-making process proceed smoothly.

  A means to handle incomplete responses must also be determined. It is short-sighted to merely eliminate such responses altogether. The incomplete response may ultimately be the best one. Focusing too much on the process itself, rather than the process as a tool to improve the fleet operation, may preclude the company from choosing the best respondent for the job. A simple e-mail or telephone call to the bidder, pointing out missing information (or other mistakes) should do the trick. State a deadline on the correction, so delay is minimized.

  Depending upon the number of respondents (some programs and services may only be provided by a relative handful of companies), use the RFP more as a “winnowing” process, rather than the final determinant. If for example, six or seven responses are received, use the RFP to narrow the field to two or three.

  Once this process has been completed, the next step should be an invitation to finalists to meet and review their responses in greater detail. Make it clear that any personnel who would be involved in servicing the account should attend, as well as the sales representative under whose name the response was submitted.

  Scheduling Site Visits/Meetings

  
  It is foolish to buy a new car without ever seeing it. Similarly, it is equally foolish to award business without visiting the bidder’s site and meeting with the sales and service team. When finalists have been chosen, the next step in the process is a meeting, preferably at the vendor’s site, to review the RFP, the response, and examine first-hand how they conduct business.

  Vendors and fleet managers understand the value in site meetings, however from very different perspectives. Vendors view such meetings as an opportunity to “show off” their people and operations. Fleet managers, particularly as it pertains to analyzing an RFP, should have a different goal. It is an opportunity for a “behind the scenes” look at how customers are handled on a day-to-day basis and how problems are solved. Additionally, questions and issues arising from the vendors response can be answered and resolved face-to-face.

  For that reason, the following practices can maximize the value of a site meeting:

• Keep in mind that the purpose of the meeting is related to the RFP, and in particular the vendor’s response. The fleet manager should bring the RFP document and notify the vendor that it will be covered in detail.
  

• Prepare for the meeting by annotating the response. Note questions, inconsistencies, and items that need further explanation. Write these notes separately.
  

• Create the agenda; have time limits and detail exactly what will be covered.
  

• Control the meeting. The sales pitch has already been given, so a formal vendor presentation is unnecessary. Stick to the time schedule.
  

• Insist on a facility tour, however not the “standard” visitor version. Focus on seeing operations directly related to the RFP. The ultimate purpose of a site visit is to gather as much detail as possible for an informed decision.

  Making the Decision

  
  Upon reviewing and analyzing RFP responses and visiting finalists’ sites, a decision is now made. Gather site visit notes and review the RFP analysis. The winner should be notified promptly, preferably by telephone, with a followup letter or e-mail.

  Additionally, all bidders should be thanked for their time and participation, and notified of the decision. (It isn’t necessary to name the winner.) Unsuccessful bidders commonly follow up with phone calls or e-mails asking where they may have fallen short. It is considerate to accommodate such requests. However, if time does not permit, the task can be deferred.