OpenSource Connections
Category: Uncategorized
Ive recently discovered Blair Ennss Win Without Pitching website (thanks to David Robinson of Birch Studio Graphics for pointing me to the fantastic FunctionFox seminar). The main theme of Ennss site, as I have gathered, is that proposal writing is, for the most part, an ineffective way for buyers to purchase specialized services, and for sellers of specialized services to prove their value. It is ineffective for buyers because the request for proposal (RFP) process often doesnt allow the buyer to truly find out if theres a fit between the seller and the buyer, and it attempts to normalize factors between competitors to create an apples to apples analysis. As Enns points out, what if youre a pomegranate? You dont want to be compared to an apple because youre NOT an apple. This is why proposal writing is ineffective for providers of specialized services, because proposals which normalize factors often then reduce the reason that youre specialized in the first place. A filet mignon prepared by Bobby Flay (or any other Food Network denizen) is not the same as beef tips purchased from Ponderosa Steakhouse. Yet, without the opportunity to engage in a conversation, the filet mignon is often reduced to the level of the beef tips in comparison.
So, how does this impact the largest buyer in the free world, the U.S. government? Less than it should. Check out the FedBizOpps website and see how many open proposals are available for a seller to peruse. As of the evening of July 30, there were 6,736 requests for proposals with expected response dates of July, 2008. If the process is flawed, then those flaws replicate themselves many times over on a regular basis.
Here are three flaws that I see in the process:
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RFPs seek to mitigate the wrong risk. As a buyer, I want to know if I pay for something, then Im going to get my moneys worth out of it. The risk i want to mitigate is that the provider doesnt know what theyre doing or provides me a bad product and I cant take it back for a refund. However, many RFPs seek to mitigate cost risk first and foremost, looking for price reductions, best offers, and fixed price bids in situations where expected outcomes are unclear or not well-defined. The mantra “nobody ever got fired for hiring IBM” seems to come to mind (though, to be clear, there are many cases where IBM should get the work), and that low cost bidders will often win. The risk that buyers of specialized services should seek to mitigate is fit, and by normalizing on other factors (are you CMMI qualified, give me your three best references, etc.), the government is trying to indirectly answer the question of fit. However, process gets in the way of answering that question…
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The strict adherence to the process makes meaningful conversations difficult. Once a RFP is published, then communication with the actual customer is not allowed. Questions must be asked via the contracting officer, who then relates them to the customer, who then answers the question for everyone to see. This process creates a game of “gotcha” because a potential provider of services doesnt want to ask the “a-ha” question that will reveal the true nature of the need and alert competitors to the same need. As a buyer, Id rather get the deep, insightful question from one seller that reflected higher skill and continue conversations with that seller to explore fit. It seems inimical to then take away the benefit of that thoughtfulness by sharing that information with all other potential sellers. Yet, thats what the government regularly does. I understand that this is a question of access, and with potential sellers often numbering in the hundreds, its a tough problem to solve. Still, encouraging more real conversations in the process would help to address the issue that the strict RFP process tries to mitigate through its normalization efforts.
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The vendor qualification process is not rigorous enough. To become a registered government vendor, you need to follow a few steps: a) Register as a legal entity (corporation, LLC, partnership, DBA, etc.); b) Get an EIN; c) Get a DUNS number; d) Register in the Central Contractor Registry (CCR). As a result, there are, as of July 30, 2008, 465,684 active registrants in CCR. Increased viable competition for the government is great–it gets more value for the taxpayer dollar. However, increasing the noise-to-signal ratio does exactly the opposite. Its why contracting officers hate full and open competitions–they have to read volumes of non-competitive responses from people who think that throwing a proposal over the wall is the surefire way to success. If contracting officers knew that they would get responses only from companies who had a reasonable probability of being able to do the work, their job would be easier. Put another way, if contracting officers knew of the fit between client and provider, their job would be easier. Tightening up the registration requirements would be one way to help this.
I believe that the government RFP process is flawed. It often puts out interpretations of needs and opens it up to the masses, putting the decision-makers in a tough situation of trying to discern differentiation from dozens, if not hundreds, of potential suitors. As a result, the RFP process tries to normalize as much as possible to reduce decisions down to a few factors, and, where possible, down to one–price. It does not address the issue of fit and localizes variables rather than finding global optimization. The process leads to over budget, out of scope, and missed timeline performance. By trying to be fair to EVERYONE who wants to participate in government contracting, the government is not fair to the most important stakeholder of all–the taxpayer.