Ask the Experts - February 2010
What is one of the most overlooked components or questions to ask in an RFP?
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Rina Cutler
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Parking companies have a tendency to mark up ancillary charges in contracts and those costs take dollars away from your bottom line. These ancillary charges are usually found in their costs related to health care and workers compensation. My recommendation is to add the following question to your RFP - Please state any mark-ups on ancillary charges such as health care or other payroll related items. Another question frequently missed is whether there are any charges for personnel that are not site specific. Both of these should save you money on your next garage RFP.
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Lenny Bier, CAPP
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A component that is often overlooked when purchasing big ticket items such as revenue control systems, garage elevators and installation, pay & display units, is to require a minimum warranty period of at least 2 years to be included in the overall bid price and to ask for extended warranty pricing , including parts and labor, for a period beyond the standard warranty. The bidder should be asked to provide pricing for each individual year of the warranty extension (years 3-4-5), at the owner's option. Since the bidder/manufacturer wants to sell the big ticket product, they will often provide a longer initial warranty, than is customary. The extended warranty price is most competitively priced at the time of initial product sale. After the fact, extended warranties or maintenance contracts including parts and labor, are usually more expensive.
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David Palmer
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When evaluating a bid, be sure to consider the "Total Cost of Ownership." Research and understand your ongoing costs (opex) as well as your initial investment costs (capex). Buyers sometimes stress the upfront costs and do not realize the expense required, or the potential savings that can be achieved, when running a given system/solution day-to-day. And what may seem like the best deal on the surface may not actually be your best choice for the long-run.
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Mary Smith, P.E.
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I would suggest that the RFP include the following: "In a separate statement not exceeding 1/2 page of your proposal, please comment on any elements of the RFP that could be refined to reduce cost or improve the value of the project for the client. "
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John Nolan, CAPP
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The most important overlooked components of RFP's are inadequate scoping detail and a lack of prequalification criteria for contractors, products or services. This lack of due diligent processes often leads to marginal contractors bidding on a project they shouldn't be; substandard products that are substituted and less then complete pricing feedback for products and/or services. This leaves the owner open to contractor change requests (CCR's) from the winning contractor usually after the work has commenced. These additional costs for the missed scope now force the owner to pay more then expected to receive the quality or quantity desired or compromise standards due to inadequate budgets which were developed based on an incomplete RFP scope.
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Linda Kauffman
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The biggest issue overlooked by most is simply the lack of knowledge. The client issues an RFP and doesn't understand what is available in the market. They have done no research to see what is out there and then write a spec based on what they think they want. The client should first do market research. This includes networking with peers for ideas and meeting with vendors and understanding their offerings. Once an understanding is obtained, a RFP can then be written based on realistic expectations. The client actually saves money by doing this because multiple vendors will respond which should make it more competitive in price. There should also be few customization charges since the client is using an off-the-shelf program and support costs are cheaper.
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Roamy Valera, CAPP
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One of the most overlooked components is a detail description of the levels of services that is expected to be provided by the selected vendor. Such detail should be inclusive of every aspect related to the service (hours of operations, staffing levels, response times on complaints, marketing campaigns, performance indicators, etc) leaving not one item to the imaginations and/or assumptions of others as to how the service is to be provided. The more clearly defined goals, objectives and levels of expected service, the better opportunity to have level the playing field!
