By Cheryl Higley
Loyd Bowman has sat on both sides of the table in snow & ice management negotiations, both as a snow contractor and a property manager.
"RFPs are intended to be fair for everyone. It should be about taking different sides with different motivations and meeting in the middle to negotiate a deal that will work," he says. "But the RFP has turned into a bullying tactic to force price down. Property/facilities managers need to realize that for snow contractors to be in business, they have to have the opportunity to make a fair market price."
What's derailing the process? Bowman pointed to a few reasons:
- Overly aggressive procurement practices are driving good vendors away. "They are put in position where they can't possibly perform to the level of service required given the numbers they are expected to meet."
- The scope doesn't meet the actual needs of the property, particularly when scope is being set by someone who may not know the specific needs of the property or even know anything about snow. "Snow is only one thing in his portfolio of responsibilities and he may not even know what to ask for."
- Unqualified vendors are overreaching and failing because they can't fulfill the terms of the RFP. "They need to step back and realize the RFP may be too big for them. You only have one name. If you damage it, you may have a hard time rebuilding it."
Bowman cast blame on both sides for the breakdown in the RFP process but said both sides can also help repair it if they go back to the basics:
- Facilities managers need to look at the issues and determine what's going wrong. Is the scope realistic? Is there contradictory language? Are the internal/external processes flawed? "If several vendors have failed, is the snow contractor the problem or is it you?"
- Look at what the properties really need, and determine an accurate and realistic scope. "Vendors will provide pricing based on the RFP. There will be conflict down the road if the expectations are not the same as what's in writing." Have those conversations early before drafting an RFP that will doom the vendor to fail.
- Develop good criteria for qualifying those vendors who truly are capable of delivering the service you're requesting. "So many times non-qualified vendors get in on price. FMs need to set the criteria for what a successful vendor looks like and stick with it." On the flip side, vendors need to be honest and not get into something they aren't ready for. "If you know going into it you couldn't possibly meet the scope within the RFP restrictions, do not bid."
- Facilities managers must look at the end goal before starting the RFP process and take responsibility for the outcome if it fails. "Be realistic and fair with expectations. Use your spend history as a guide, not a limit."
A key disconnect lies in the timing of RFPs. Property managers admitted they wait too long to begin the process, which pushes both sides against the wall.
For example, the client may think starting the RFP process in August is OK to get a deal done and in place by October or November. But vendors need those decisions to be made in August so they can plan purchases, staffing, etc.
"August means two things for both sides, and tight windows invite chaos," he says.
The multiple disconnects (scope, expectations, price, timing, etc.) seem to indicate that both sides really haven't figured out how to speak the same language, he says: "It speaks to the uncertainty of the relationships. We need to work toward the middle so we can rely on each other as professionals. Our interests and motivations may be different, but the goal is the same--we want the snow to be gone."
Cheryl Higley is Editor of Snow Business magazine.