Notifying contractors. The next step is to develop a list of contractors interested in participating in the process. Depending on the relevant internal procurement rules, this can be achieved by various methods, including via a direct mail announcement to potential contractors, via public announcements through the print media or Web sites, or via recommendations from independent consultants.
Regardless of the solicitation method used, a very brief description of the scope of the contract should be included with an invitation for interested contractors to express their interest and submit their contact information.
Multiphase process. Because the best-fit selection process requires much more time to evaluate contractors and their proposals, a multiphased selection process is necessary for larger or more complicated contracts. It's advisable to go through this even with smaller contracts. The multiphased approach lets the company filter out contractors who do not meet minimum qualifications. This spares the contractor and the client from spending valuable time continuing with a bid process that, for them, has no chance of succeeding.
Prequalification. After compiling the list of potential bidders, the next step in the multiphase process is the prequalification. Contractors should be prequalified before they can compete in the full selection process. Each interested contractor is given a prequalification questionnaire designed to elicit information that will be used to determine its overall quality and capabilities.
Based on evaluations of the completed prequalification questionnaires, typically six to eight contractors are selected to continue in the selection process. The author's experience has shown that the range of six to eight provides a large enough pool of participating contractors to allow for a valid competition while keeping the number of proposals that you will have to evaluate at a reasonable number.
Preproposal conference. The prequalified contractors are then presented the full RFP and a preproposal conference is conducted. This step is essential. The conference can benefit both the contractors and the client in clarifying points of the RFP, the eventual contract requirements, and the selection process itself, thus saving valuable time and effort and helping to avoid protests after the final selection. Issues arising out of the conference may necessitate issuing amendments to the RFP.
Proposal format. The format and order of the proposal elements need to be strictly mandated, because evaluation of the submitted proposals can be extremely time consuming if they are not uniform.
Contractors view the bidding as an opportunity to showcase their companies and capabilities, so proposal packages are frequently several inches thick and consist of the actual proposal response along with brightly colored marketing materials. Without a strictly mandated format, information that you consider vital to the selection process may be buried deep inside any one of the enclosed documents and, once found, may be in marketing language that can be vague or downright deceptive.
Scoresheet. No proposal ever exactly meets the elements of the contract as required by the RFP, which makes a fair comparison between contractors very difficult. The author recommends the use of a scoresheet to focus on the selection criteria most important to the hiring company. That will help you avoid getting bogged down in reviewing extraneous information. (For more on what's included in a scoresheet, see the box on page 58.) A single scoresheet can be used to evaluate the prequalification packages, and it can later be expanded to be used to evaluate the proposals.
Presentations. You may want to ask contractors that score the highest in the proposal-evaluation phase to make oral presentations. This step is especially useful if the evaluation process produces a near tie among several contractors.
Presentations provide the contractors another chance to showcase their strengths and provide the client the opportunity for additional clarification of proposals. Clients should require that the actual account representative who would be assigned to their contract be a part of the contractor's presentation team. If oral presentations are planned or contemplated, it's important that additional time be built into the selection process to accommodate them.
A formal announcement of the selected contractor, pending final contract negotiations, completes the selection process.
This exhaustive screening and selection process will tempt some companies to pick and choose techniques from this process to narrow the field to a select few qualified contractors and then still make a final selection based on the lowest bid. Abandoning the process at this point defeats the whole purpose.
In one case in which the author served as a consultant, the client followed the selection process for most of the way, but the company decided to skip the final evaluation of proposals and instead conduct a real-time bidding war online between the contractors. The client was very happy with the low price that resulted. But a review of the final written proposal revealed that the winning contractor had cut many hard requirements of the RFP'including almost all supervisory posts' to make the lower bid achievable.
After-action interviews with other involved contractors revealed they had also been cutting service to reduce price as the online bids got lower. Estimates to return missing requirements to the winner's proposal exceeded $300,000 a year, approximately 10 percent of the value of the entire contract.
Because the client wanted nevertheless to continue working with this particular contractor, the company chose to reenter into negotiations with the winning contractor. The final contract cost ended up being much higher than the original winning bid, and the contract took nearly a year to finalize.
Mind-set. In a few cases, such as with some government entities, completing a contract by low bid is mandated in law. However, typically it is institutional bias, particularly in the case of purchasing departments, that pushes toward low bid. Other times it is simply ignorance that an organization is not limited to low-bid selection for service contracts, usually due to lack of experience.
For example, in one case that my security consulting firm worked on, a large metropolitan library system sought a security contractor. The selection process had to be delayed for several months while a debate took place over whether a bid that was not the lowest could be accepted. The library's legal counsel, a city attorney general, was enlisted to research city contracting law.
After weeks of research and some lively arguments with the city's contracting department, the latter finally had to admit that there was provision in the law for "personal service contracts" to be entered into based on criteria other than low bid. The issue should have been settled, but as is often the case, institutional bias also had to be overcome.
After a contractor was selected based on its ability to meet the library's security needs- a "best-fit" contract-the selection process and price had to be justified to the library's board of directors, and some board members were definitely biased toward the lowest price. As the consultant on the project, I was brought in to explain the selection process to the board. I emphasized the meticulousness that went into the final selection, and pointed out the expected benefits of the quality- control provisions designed into the new contract.
Additionally, the security manager enlisted the aid of several chief librarians of outlying branches who spoke to the board about the criticality of the security force to the continued safety of the libraries' patrons and staff, particularly in high-crime areas. In the end, the board accepted a new contract with personnel costs that were fully 20 percent more than the existing contract.
Results. The best-fit approach is about getting better results because needs have driven the process. In the case of the metropolitan library just discussed, for example, the client says there has been an improvement in the security service with the new vendor on board. One example is in mandatory visits by the account manager to officers at the branches, a requirement of the RFP (and, incidentally, one of the drivers of the higher price).
To ensure that these supervisory visits happen as required, a guard-tour recording system is in place. The library reports that the account manager, rather than the library's head of security, is finding and fixing guard-force problems thanks to the extra level of supervision that the contract requires.
Consultants. The selection process for a security officer contractor should be a team effort involving the security staff, purchasing department, and legal department. Some companies also find it valuable to hire a qualified independent consultant to manage the selection process or lead the selection team.
A contractor's marketing and sales teams may well be writing hundreds of proposals a year. An experienced consultant can level the experience playing field for the client, guide the client around the pitfalls of the process, develop a comprehensive RFP and prequalification questionnaire, evaluate proposals, and relieve the client of the minutiae related to the entire selection process. In most cases, this can be done for less than 1 percent of the cost of the entire contract.
A properly conducted selection process, approached positively by both sides, will result in a win-win for the client and the contractor. For the client, the right contract will result in superior service. For contractors, competing on quality and service instead of pure low bid will reduce personnel costs through lower turnover and supervision requirements, and in general improve the reputation of the contractor and the security officer industry as a whole.