There are substantial benefits to using a formal RFP in the procurement process. Buyers can outline precisely what they need, helping sellers understand these needs to craft an accurate response.

Sometimes, however, the RFP process can become bogged down in unneeded detail, and suppliers can become confused about the products or services the buyer desires. The process 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 fleet services contracting, valuable information and interaction can be lost. If used as one of many tools available to a fleet manager to decide upon a vendor, an RFP can be invaluable.

Begin with Available Vendors

Companies seek information on potential vendors for a variety of reasons.

• Having been given the opportunity to provide a service or product, an existing vendor has not performed up to expectations.

• Company policy mandates that all contracts for products and/or services are regularly put out for bid.

• Buyers, unfortunately, often decide to go "fishing." There may not be a particular problem with an existing vendor nor a corporate policy requiring contracts to be bid; however, a fleet manager decides to "see what's out there." A change is made if there's a better deal to be had. The downside, of course, is that if there is no price benefit, all the work is for naught.

Among these and other reasons, the first two are legitimate: one seeks better performance and 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 and for the fleet manager, whose time is doubtlessly better spent elsewhere.

Assuming the fleet is looking to award its business to a new provider, the first step in the RFP process is determining which vendors can provide the service. Most fleet managers are well informed about available providers, no doubt having spoken to or met them in the normal course of doing business during the year. 

Many such contacts end with a request to "send some information." If the fleet manager has kept a file of such material, the list of potential vendors is ready.

Established contact should be made with each. One contact method can be a request for information (RFI), in which the buyer first notifies sellers what product or service is needed, asks sellers if they are interested in bidding for the business, and finally, obtains basic information on the company (corporate headquarters, how long they've been in business, financial information, etc.). 

The request can be in hard copy (mailed) format or electronic (e-mailed Word document to be completed). Whatever form is used, make certain a response deadline is included.

Basic fairness to all vendors also requires clarifying the reason for the request. Say so if the purpose is to "fish" for possible deals. Those vendors who prefer not to commit the time and expense of preparing a response can decline.

Finally, the competition for new business in the fleet industry is keen, and it is almost certain that 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 be awarded the business.

What the RFP Document Covers

What is included in the RFP document and how it is assembled can make the process more efficient and effective.

Increasingly, some level of participation by a purchasing or procurement function in the company is required in the search for fleet management products and services. This involvement can be both a blessing and a curse, depending upon the level of participation, the purchasing function's authority, and how well the purchasing staff understands what is 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 page or two or encompass dozens of pages. 

There is nothing wrong with including boilerplate language; it can clarify the terms and conditions under which the RFP will be analyzed, including the important confidentiality agreements of great interest to any bidder. The difficulty arises when the purchasing boilerplate is "mixed" with the RFP itself, causing confusion and lengthening the time it takes to prepare a response.

Any and all standard purchasing language unrelated to fleet program specifics should be segregated and marked. "Corporate Procurement Terms and Conditions," instead of "Fleet Maintenance Management Program RFP," enables responding vendors to work concurrently on both. Their legal departments review the terms, while the sales and service departments can concentrate on the nuts and bolts of the response. 

Indeed, such boilerplate can even be sent separately, before the RFP itself, so that legal issues can be dealt with in advance, and both buyer and seller can concentrate on the program response.

What is the RFP content? What kind of information should be requested, and in what form? Specificness and simplicity should be kept at the forefront throughout the process. For example, when a new supplier is sought for an existing program, the fleet manager should know exactly what new program is required, whether it is already being used or not yet available.

Using a maintenance management example, a key component of a successful program is reporting capability — how information generated by the maintenance and repair process can be viewed and analyzed. 

Rather than asking respondents to merely describe, in general, reporting or data mining capabilities their program provides, fleet managers can describe in detail exactly what report formats they want, i.e., "Does your program provide the following reports?" followed by a list of specific report formats. This list would include, again, reports the fleet manager already has and found useful, as well as formats that he or she would like to see but are inaccessible.

Asking what the responder can provide, rather than what the fleet manager wants, 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 useful," offers the opportunity to view reports that may not have occurred to the fleet manager while separating the "wheat from the chaff" in the analysis.

All fleet program RFPs should include requests for basic information on the bidders' programs.

• Data. Expense or program data format, accessibility, and ownership.

• Service. Service levels: driver and fleet staff on a day-to-day basis and fleet manager on a strategic level, including program reviews.

• Implementation. Step-by-step description of the implementation process from contract signing to program rollout.

• Financial. Payment terms and prompt or early payment incentives.

Fleet program pricing takes many forms. If, for example, the fleet previously has been charged for maintenance management on a per-vehicle, per-month basis and prefers this method, the RFP should require the response to reflect this preference. 

Pricing should take no more than a single page, perhaps two for a response for a leasing program (capitalization schedules can be relatively lengthy). Specifying the desired pricing form simplifies analysis and ensures all responses are reviewed on an apples-to-apples basis.

Can you provide it?" is a far better form for an RFP than "Tell me what you can provide."

Technology has enabled fleet managers to create RFPs in electronic documents and communicate via e-mail rather than exchanging voluminous proposal books and papers from the past. Most respondents also have electronic marketing material (PDF files, Word documents, PowerPoint, etc.) that can be attached separately to the responding e-mail.

Finally, the document should include a service level requirement detailing the fleet manager's expectations. It may well be that the details will be worked out during contract negotiations; in that case, simply notify all bidders that if they are awarded the business, they will be expected to negotiate clearly defined and measurable service levels to be reviewed at a regular timetable (at least once per contract year) and that there will be consequences for failure to meet outlined goals.

Online RFP Gaining Popularity

Another newer form of RFP that is gaining in popularity is online bids. A number of formal online systems can be used to post bid requirements and gather responses. Fleet managers seeking bids for what are often complex service programs should be cautious when using these systems.

Most online bidding systems were originally developed to purchase items: parts, supplies, etc. Using Web-based systems to purchase a leasing program, for example, has disadvantages. Online RFP systems generally do not allow the simple entry of service pricing, i.e., they often ask for a "price" for a "quantity" of a good.

A fleet leasing bid is comprised of several components, including interest rate, administrative fees, capitalization schedules, and amortization. These components usually do not fit well into many online bidding systems' "pricing" sections. Bidders must attach documents to their responses anyway. For online fleet business bidding to be an improvement over other methods, it must provide some advantage. It is not an improvement if responders must include attachments, effectively separating various portions of their bids.

Reviewing Responses

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 awarded business should have been finalized before issuing the RFP. To ensure a sound decision, the fleet manager must ask several questions to develop these criteria.

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

Other than pricing, decision criteria should be measured or rated. Such measurements must be outlined prior to issuing the RFP. Whether by a complex matrix or simple numerical rating, documenting the response rating criteria makes the analysis and decision-making process proceed more smoothly.

The process of handling incomplete responses must also be determined. It is short-sighted to simply eliminate incomplete RFPs altogether; after all, 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 respondent best suited to do the job. A simple e-mail or telephone call to the bidder, pointing out what was omitted (or other mistake) should do the trick. Put a deadline for the correction so that the delay is minimized.

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

The next step is an invitation to finalists to meet and review 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.

Site Visits Critical to Decision

It would be foolish to buy a new car without ever seeing it. Similarly, it would be equally foolish to award the business without visiting the bidder's site and meeting with its sales and service team. When finalists have been chosen, the next step in the process should be a meeting, preferably at each vendor's site, to review the RFP and their response and see first-hand the vendor's business operations.

Vendors, as well as fleet managers, see the value in site meetings, but from very different perspectives. Vendors see it as an opportunity to "show off" their people and the operations of which they are most proud. Fleet managers, particularly as it pertains to analyzing an RFP, should have a different purpose. It is an opportunity to get behind the scenes, to see how customers are handled on a day-to-day basis and how problems are solved, and to clarify the questions and issues arising from the vendor's response.

The following practices should help maximize the value of a site meeting:

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

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

• Create the agenda, including time limits and detailing exactly what will be covered.

• Control the meeting. The sales pitch has already been given, so a formal presentation by the vendor is not needed. Stick to the time schedule.

• Insist on a tour of the facility, but not the standard visitor version. Focus on viewing operations directly related to the RFP.

A site visit's ultimate purpose is to gather as much detail as possible to enable a thoroughly informed decision, details unavailable in the RFP response, such as meeting and getting to know the people who will service the account.

Making the Decision

After reviewing and analyzing RFP responses and visiting the finalists' sites, a decision is made. Gather site visit notes and review the RFP analysis. The winner should be notified promptly, preferably by telephone, with a follow-up 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. It will soon become common knowledge). It is not uncommon for unsuccessful bidders to 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 it, the task can be deferred.

All in all, there are several key components to a successful RFP process:

• Preparation is critical. Know why the process is being done and its exact goals.

• Keep the RFP as simple but specific as possible. Tell bidders what you are looking for and ask them to provide it.

• Separate "boilerplate" purchasing language from the main body of the RFP, if possible, and make that section available in advance.

• Allow for mistakes, omissions, and errors. Don't disqualify a bidder based simply on an omission or confusing answer.

• Establish criteria for judging the responses. Don't "commoditize" them. Contracting for a fleet program is very different from purchasing bulk quantities of goods.

• Narrow the field based on the analysis of RFP responses. Notify those not included in the final analysis and schedule site visits with finalists.

• Create a site visit agenda with the same simplicity and specificity as the RFP. Control the meeting discussion and keep to the time schedule.

• Once the decision is made, notify all participants and try to accommodate unsuccessful bidders' requests for the reasons they didn't make the cut.