RFP Process: Flawed or Fixed?

Posted on May 8, 2012

0


In the past, I examined the flawed nature of the Request For Proposals (RFP) process.  I question their ability to ensure the best team is selected.  I have pondered their value from a time-value of money aspect, and argue RFPs in healthcare are a significant waste of money, in real terms.

RFPs involve a series of complex decisions not only for the writers, but for the responding firms as well. Assuming the RFP process is in place to ensure the best team is selected (and that is a big assumption), designers and builders read an RFP for the obvious goals of the project, and then overlay their collected intelligence about the prospect to determine how to most accurately respond to an RFP.

Many in design and construction feel RFPs are “fixed”.  In other words, RFPs are a tool to legitimize a forgone conclusion.  Hospitals use RFPs, a process recognized as objective and fair, to camouflage a decision that behind closed doors is quite biased and subjective. True or not, this conspiracy theory comes with the territory. Let’s table this discussion for another time, though.

But RFPs flawed? How can this be?

I contend RFPs are broken ‘out of the box’ because they self-actualize project dis-integration. They frustrate and undo all of the teaming benefits architects and contractors have been working so hard to create over the past decades. Let me show you how.

When an RFP is publicly released, or ‘put out on the street’ for teams to respond to, many crucial project decisions have already been made. Someone (architect, consultant, owner) has created a program. Someone (contractor, consultant, owner) has created a budget. Someone (contractor, consultant, owner) has likely created a schedule. Someone has likely drafted a site approach, preferences for structure, massing, systems and maybe even materials as well.

At this point, the owner is looking for a chef to complete a meal that already has the courses decided, most of the ingredients purchased, and the amount of cooking time determined. Who wants to step into this assignment? What happened to the value the chef is supposed to provide?

By the time an RFP is drafted, a lot of project value has been inadvertently destroyed. The hospital has already forfeited:

  1. Opportunity to critically vet the program
  2. Opportunity to study and maximize internal processes
  3. Opportunity to maximize Lean and Six Sigma initiatives
  4. Opportunity to get creative input from the architect, contractor and major subcontractors early.

The owner may think the project has not begun yet because the architect and contractor are together ‘at the beginning’, but let’s be real:  a lot of decisions have already been made. And these items are where the creative teaming of design and construction add major value, and maybe even save millions.

An owner would argue the teams it selects have the freedom to do whatever they want provided they meet the minimum project performance requirements spelled out in the RFP. Once again, this is using the RFP to mask reality. A Board of Directors has already rubber stamped the project parameters, and the memory of Boards is legendary when it comes to remembering the first and lowest budget number—regardless of how it was derived.  There may even be a philanthropic effort in place to raise money before the project has been properly scoped and accurately estimated.

I imagine sometime in the future hospitals will be able to find the relevant information needed to make team selections on the internet.  Formal, lengthy, bound submittal booklets that are never read will be bypassed.  And all the related but suspect activities intended to assist in team selection, including RFPs, will become extinct.  Until that enlightened era free from score sheets, Certificates of Need and all things superfluous arrives, I expect many will still consider rolling the RFP dice.

Advertisements