RFP Guide

A Request for Proposal (RFP) can be a useful tool in selecting a Relocation Management Company (RMC). When done correctly, it allows your company to compare services, culture and pricing among various relocation providers in an efficient format. The purpose of this guide is to assist you in the RFP process.

RFP vs. RFI vs. RFQ
Request for Proposal is the most common request made. However, it is important to employe the right request type depending on the situation. In addition to RFPs, RFIs and RFQs are also utilized on a regular basis. Here’s what you need to know.

• RFIs gather information, usually to narrow the supplier field. RFIs do not request pricing and they are not an invitation to bid.
• RFPs invite suppliers to submit business proposals, including pricing. They usually have detailed questions that will allow meaningful comparisons between suppliers.
• RFQs invite suppliers to bid on a specific good or service. They are often used when price is the only factor.

STEP 1: Create a Project Plan
Form a mobility selection team. This will usually consist of Senior Management, Procurement, Human Resources, Payroll, Information Technology and Legal. Make sure all the company’s stakeholders are included. Identify each team member’s role and responsibilities.

Do your homework. Distinguish between what your company wants and what it needs. Consider your relocation program’s history. Research current best practices and trends. Why are you going out to bid? Is this to check market pricing, due to quality issues with your current supplier or is this just a bid cycle? All stakeholders should express their vision for their new relocation service provider.

What will the winner look like? Create a scoring matrix. Weight each question in your questionnaire based upon key selection criteria. Determine which questions are most important to your company.

What’s your timeline? Establish milestones and assign a projected timeline for each stage. Laying out the process from start to finish is critical. A well thought out plan can save you a lot of time and money. Determine who is responsible for each task. An effective process will usually have a six month timeline from initiation to implementation.

STEP 2: Creating the RFP
The starting point is a description of your organization along with basic corporate information. Include information on why are you going out to bid and what key characteristics you are looking for in the new provider. Why would they want to partner with your company?

It is critical to define the scope of work. List your current relocation policies and allow for recommendations. Furnish historical data about your program. Describe your mobility program objectives. What services are you looking to outsource? How many employees do you relocate each year? Breakdown this information by domestic and international, homeowner, renter and lump sum. Provide information about any tiered policies. What are your primary relocation/assignment locations? What is the average relocation home value? It is important to provide as much detail as possible to eliminate assumptions on the part of the supplier.

Next, organize the questionnaire. Key sections of an RFP typically include: Company Information, Account Management, Service Delivery, Domestic Services, International Services, Technology, Reporting, Expense Management, Supplier Management, Implementation, Client References and Pricing. If your company is experiencing specific problems with their current provider, be sure to address those to see if a new provider can offer a solution. Remove repetitive questions and those that do not apply to your program.

Communicating the criteria you plan to use to select the final vendor is important, as it can save both you and suppliers from wasting time. It also encourages participation by establishing objective criteria all suppliers can count on to be used in the selection process. Let potential suppliers know how you will be choosing who is invited to deliver a best and final presentation and how the eventual supplier will be selected.

Be realistic when you set deadlines. The more questions your RFP contains, the more detailed the required response will be and the longer the time it will take suppliers to reply. Remember to factor in weekends, holidays, internal vacations or travel schedules and the time it will take your team to meet, evaluate and score proposals. This will provide the timeline that you give to bidders regarding how long the RFP evaluation process will take, when the bidders will be notified of their selection in moving forward and when you expect implementation to begin. Provide a contact for all supplier questions. All other team members should not meet or speak to potential suppliers during the RFP process.

Narrow the list. Not all RMCs are created equal. Performing a pre-screen RFI is one way to determine if a provider offers the services to meet your organization’s needs. Through the RFI process, you can narrow your potential supplier list to 4 or 5 bidders, considerably narrowing down the volume of information you receive in response to your RFP.

All of the logistics for RFP submission should be set up-front. In what format do you want your RFP to be sent? How should responses be submitted? Options include: online supplier portal, hard copy or email with attached Word or Excel files. Decide what works best for you and your organization. Today, most companies request electronic submissions. If utilizing an online portal, be mindful of restrictions. Setting character limits, word counts or stipulating the type of response may prohibit prospective suppliers from giving an appropriate or in-depth response. Whatever format you choose, keep in mind that the purpose of the RFP is to compare Relocation Management Companies. The services and pricing scenarios are much different than purchasing commodities. Choose a format that will maximize the quality of your responses, while also making them as easy as possible to share and evaluate.

Step 3: Evaluation & Selection
The selection team should score responses based on the scoring matrix created during the planning stage. Once completed, gather all team members results and do a cost analysis.

Once the list of possible providers has been narrowed, conduct telephone interviews with the provided references. Discuss all aspects of the supplier’s performance. Remember that no vendor is perfect all the time so keep in mind that how a supplier addressed issues or challenges is key. Always check references as part of your decision making process.

Schedule an on-site visit and presentation with your top 2-3 choices. Give presenters adequate time to make travel arrangements. This is your opportunity to meet the account team and ask in-depth questions. Ask presenters specifically what they can do for your company. This is your chance to get a feel for a supplier’s culture and their fit with your organization. One supplier may look perfect on paper, but if cultures clash, you are better off selecting a different provider. See demos and sample reports, discuss implementation expectations and any any additional information that will give you a clear picture of the working relationship with each potential vendor.

Before notifying the selected supplier, it is important that you call the suppliers that were not awarded the contract. An explanation of why they were not awarded the business is especially helpful and appreciated. Be honest in your evaluation and your feedback.

Sample RFP Timeline

Mistakes to Avoid
Inadequate planning. Pre-RFP planning is a critical element of the process. Neglecting to take the necessary time to properly map out the entire RFP process from start to finish can cost your company time and resources and delay implementation of your mobility program.

Inaccurate volume. Pricing in the relocation industry is based upon volume. Pricing models are typically based on a mix of service fees, referral fees and booking commissions. Accurate volume estimates will ensure you receive appropriate pricing in your responses and eliminate surprises after implementation. Also, different suppliers perform better at different volumes. Inaccurate volume estimates can lead to working with the wrong supplier altogether.

Impractical timelines. Setting a reasonable timeline can make the difference between receiving a thoughtful, customized response and a rushed response. Allowing time for a tailored response and review will prevent costly mistakes.

Focusing on price is a common mistake. Remember that relocation is a service business. The total value of the service cannot be broken down into fees alone. If you are focused only on price, you could be be hindering your ability to partner with the RMC that can provide you the best total solution.

Withholding policy information. Policy information allows vendors to prepare responses customized to meet your company’s individual needs. Vague information will generate vague responses which will make it difficult to properly evaluate if a supplier can meet your business needs.

Not understanding your own company’s true needs and also not having a clear consensus on what the needs are. Performing adequate due diligence is necessary to create a complete picture of how relocation touches various departments within your company. Each provider will have different strengths. Have a clear picture of what a RMC needs to bring to your mobility program.

Final Note
Creating and responding to RFPs is a major investment for both the client and the supplier so it is extremely important to allot enough time and resources to the process to ensure a successful outcome. Establishing a quality method to manage a cost effective and time sensitive bid process will help you choose the best partner for your company’s mobility program.