Why Your Next RFP Needs to be an Outcomes-Based RFQ

Written by Megan Asikainen

Purchasing departments that hold fast to fictional proposal rules risk hampering personnel who want to make a difference.

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RFP. Is there any other acronym in local government that elicits such feelings of time-consuming drudgery? The necessary evil that is the request for proposal (RFP) process is valuable to ensuring that municipal leaders are completing the due diligence needed to enable the responsible spending of taxpayer dollars, especially when it comes to software and technology. Like many processes initially designed to put guardrails around subjective decision-making, the RFP process has evolved to be burdened by inefficiency, red-tape, and the kind of restraints that make efficient solution selection at times impossible, thus standing in the way of its very own purpose.

For smart municipalities that want to take back the purchasing decision process without compromising on responsible tax dollar spending, there is a better way.

The Flaws of RFIs and RFPs

In many purchasing scenarios that impact local government—such as the purchase of furniture, electrical supplies, or road maintenance supplies—it’s possible to compare proposals on an individual line item basis. When the items for purchase are commodities, the comparisons are simple. How much does each vendor charge for labor? What is the cost of a light bulb? What are the insurance premiums?  This line item by line item evaluation process simply does not work when the comparison is among technology solutions.

Moore’s Law states that computer processing speeds double every 18 months. As a result, technological change happens at an exponential rate. It is, therefore, even more critical not to compare technology solution partners for what they all do, but for what they don’t all do. The potential solution partner that offers time-saving functionality your administration never knew it needed, let alone existed when it created its RFP, is intrinsically more valuable than the vendor that ticks off all the boxes of known requirements but offers nothing innovative.

Decoupling the Requirements Component

Also, detrimentally, the RFI and RFP process hold rigidly fast to their stated requirements, forcing respondents to address only to requested functionality, giving them little opportunity to showcase their added value. Innovative solution partners can be further penalized for not offering functionality that the industry would argue is outdated, but which is still noted as required within an eight-year-old RFP created by the municipality’s procurement office and that was written by someone who will ultimately never touch the sought-after solution.

The risk, then, for municipal purchasing departments that obstinately hold fast to fictional proposal rules within their RFP process, is that their bureaucracy will hamper the ability for personnel who genuinely want to make a difference in their community, to identify a proven partner to help them accomplish their goals. By failing to think from an outcome-based perspective, they become blinded to innovative opportunities.

Fortunately, there is a solution.

A New Approach to Proposal Requests

While solutions such as piggybacking and purchasing schedules exist to enable expedited purchasing, entirely circumventing the traditional procurement process is likely not an option for communities whose laws require them to follow established procedures. What needs to occur, then, is to rethink what municipalities ask for in new partner proposals.

Such an innovative approach to partner solicitation was used last year in Carlsbad, CA, where the community issued a request for qualifications (RFQ) for “innovative digital transformation ideas and partners.” As discussed in this article by GovTech, Carlsbad’s goal was to qualify one or more digital transformation partners without hamstringing potential partners to an abstract checklist of fabricated features that they only may need (or not).

In the article, Carlsbad’s Chief Innovation Officer describes the RFQ process as “a form of challenge-based procurement.” As opposed to the traditional prescriptive method of telling companies what they need to deliver in an RFP, the outcomes-based RFQ poses a need or problem and asks respondents to provide self-defined solutions.

In Carlsbad’s case, the RFQ requested submitters to supply a road map for how they would solve the identified problem, a statement of qualifications, and case studies—three components that still enable Carlsbad’s leaders confidently to validate their ultimate selection and warrant their dollar spend.

Be an Agent of Change in Your Community

Municipal clerks hold highly respected positions within local government. This earned respect means that they are uniquely positioned to collaborate with administrative leaders, elected officials, and procurement overseers to explore the RFQ process and tailor it to meet the needs of their administration and their citizens. If the goal of the procurement process is to find the best solutions to serve citizens, any exploration in improving that model should be welcomed with appreciation from everyone who wants to make a difference for their citizens.