CHAPTER 5

How Do I Manage the RFP Evaluation Process?

Evaluation. Perhaps the word makes you cringe as it brings back memories of school exams and student rankings.

Now the word evaluation shouldn’t make you cringe; it’s a time for excitement as all the hard work that has gone into preparing your RFP is going to start paying off. You’re in the driver’s seat, and it’s up to you to decide who will move forward with you and who’s going to move on to another opportunity elsewhere.

The importance of RFP evaluation criteria

While the RFP evaluation stage comes after you receive bids from suppliers, RFP evaluation criteria should have been set up long before. If you haven’t told suppliers how you will evaluate their bids, how will they know where to focus their attention? Clear evaluation criteria will help them see what’s important to you and allow them to respond accordingly. Clear criteria will also help your evaluation team as they know where to focus their energy.

The evaluation team

The RFP evaluation team should, ideally, be made up of individuals from a number of functions within your organization. A cross-functional team means you’ll be able to take advantage of expert knowledge for highly technical or complex specifications. The makeup of your evaluation team may determine how you choose to go about the evaluation process.

There are two primary ways to organize your RFP evaluation. Regardless of which you should choose, the idea is to give individuals time to evaluate on their own first, and then come together and discuss the bids as a team.

  1. Every team member scores every offer.
    This technique can work if you don’t have very many offers to go through or if the RFP doesn’t require specific technical expertise. You’ll get a holistic overview of each RFP response and can then compare overall impressions during the whole team evaluation.

  2. Every team member scores a certain aspect of every offer.
    Here’s an example: you’re looking for cloud-based project management software. In this case, the IT Security team member does not need to evaluate pricing or company background, only the security questionnaire section on the RFP. Similarly, the Finance team member only reviews the pricing and doesn’t look at the security questionnaire.

Your choice will depend on the number, length and complexity of your RFP responses. Whichever one you choose, though, you should make it clear to your team that the offers are to be evaluated based solely on what’s been submitted, not outside research or opinions from third parties.

Once you know who will be evaluating the RFPs, you need to decide the how. Below we’ll address two important concepts: weighted scoring and setting priorities. We’ve got simplified scorecards as examples, too.

Weighted scoring

Weighted scoring allows you to establish the importance of different evaluation criteria. This type of scoring will also help suppliers identify where to spend most of their time when responding to your RFP and help them craft the most competitive offer possible.

Here are two ways you can set up an evaluation scorecard using weights:

In this first example, you decide on a whole number, preferably a multiple of ten, as your possible maximum. Then you divide up the points according to the importance of each criterion. In the example below, you can see that Requirements is the most important criterion and has, therefore, been assigned 50 points, 50% of the total 100 points available.

table1

Pro: Easy to set up, especially when the final total is out of a multiple of ten.

Con: Each criterion is measured on a different scale. For example, requirements are scored out of 50 points total, but security is scored out of 10 points.

This second example requires a bit more initial set-up, but makes it easier on evaluators as the same scale is used for each criterion. You can see that the scale used below is from 1 to 10. The weights are the same as above and then the final total score is calculated according to the same 10-point scale.

table2

Pro: The same scale is used across all criteria.

Con: More complex to set up and calculate.

While weighted scoring can be set up in Excel, an efficient e-sourcing solution can save you loads of time (and limits the possibilities of calculation errors) and provide you with an apples-to-apples comparison at the end. For example, in DeltaBid, evaluators are able to leave comments along with a numerical score, providing a qualitative element to the the review process and a record of the reasoning behind the final selection.

A graph like the one below can show you how different suppliers rank on individual criteria together with the total weighted score. A high-level overview like this can be useful when explaining supplier selection to internal stakeholders while also helping to eliminate any low-scoring offers from consideration.

graph1

Setting priorities

Weighted scoring is one way to indicate priority, especially when evaluating on a numerical scale. However, even if you should decide to go for a more qualitative RFP evaluation and rank everything pass/fail, you should still indicate some sort of priority. For example, if you receive an offer that meets your technical requirements but not your delivery and installation timeline, would that supplier still be in the running? One company might say yes as they’re able to push back the final deadline, whereas another might say no because an event requires their project to be completed by a certain time. Setting priorities will give both your evaluation team and suppliers a clear idea of what exactly is non-negotiable and what may be open to discussion.

Conclusion

As you can see, RFP evaluations can be just about as complex as you want to make them. However you decide to carry out the process, it’s important to document your decision-making process and the rationale behind your scoring. This will come in handy should a supplier go haywire and you’re asked by higher ups to explain why that supplier was chosen in the first place.

Don’t forget to share this guide with your colleagues!

CHAPTER LIST

The RFP Process: A Buyer’s Guide to Best Practices