Customize your RFP to the trade being bid.
By B.J. Schlageter
RFPs have become an integral part of the procurement process for many firms, in particular those firms juggling hundreds, if not thousands, of sites throughout the country. While this can be a great tool to gather the necessary information for a successful program, it is important to customize it to the trade that is being bid. Accurate bid details will help ensure contractors provide the most competitive costing and will also minimize the potential risk of a buyer getting the wrong information.
Establishing a contractor profile is an important first step in any bid event. Starting an RFP with an RFI (request for information) will help eliminate unqualified contractors from joining a bid event that might not fit the buyer’s needs or the contractor’s capabilities.
While overhead is important to evaluate during the RFP’s cost-analysis, it can also be useful to understand during the RFI stage so that the buyer can compare similarly sized companies. This can be done by requesting financials, organizational charts and growth projections, among other things. Depending on the intent of the buyer, it might make more sense to allocate the work to multiple contractors or possibly stick with one or two if those contractors are able to manage the volume.
Trades often change the landscape of the RFP dramatically. What might be important for a lighting RFP could have little impact on a paving RFP. One of the most unique characteristics of the paving industry is the nature in which raw materials are manufactured. Unlike some trades that allow for mass production, distribution and purchasing, asphalt and concrete are produced close to the job site.
Due to the fragmented nature of asphalt and concrete suppliers, raw material pricing can fluctuate drastically from market to market. Taking this into consideration, RFPs should consider breaking the regions down by states (rather than just a nationwide price) to achieve a more accurate cost structure. States like Texas, California and Florida can be broken down even more to further increase cost accuracy.
Another important factor to consider with paving RFPs is the equipment requirements for various service lines. As a buyer might expect, even a small asphalt crew requires a high capital investment. Basic requirements include a truck, trailer, roller, skid-steer and small crew. These items alone demand a minimum charge to dispatch a crew to a job site, which needs to be factored in by the contractor.
Conversely, service lines such as cracksealing, sealcoating and striping can be done with less expensive equipment and smaller crews. This allows contractors to apply a lower overhead component to the pricing, deliver lower mobilization fees and cover larger geographic regions with the same crew. As it relates to an RFP, these factors should be considered when designing geographic regions for each service line.
As with many trades, there are a wide variety of material choices in the paving industry. It is important that the RFP communicates the buyer’s material expectations so the pricing is consistent. Asphalt can be designed to meet many different specifications; however, researching a state DOT mix design is always a good baseline. In terms of concrete, things such as reinforcement and PSI make substantial differences in pricing. As a general rule of thumb, national contractors should have enough experience to provide useful input regarding material specifications and geographical impacts before the bid event is underway.
While the extent of the details required for a successful RFP can be overwhelming, it is important to know that resources are available. Whether it be other buyers with similarly-structured programs, third-party consultants or trusted contractors, there is plenty of knowledge available to execute a successful bid event.
— B.J. Schlageter is the director of national accounts at Rose Paving LLC. Headquartered in Bridgeview, Illinois, Rose Paving is a nationwide paving contractor with a division dedicated to servicing national accounts.