Requests for Proposals (“RFPs”) are a great way to gain business, visibility and compete in an otherwise crowded marketplace. RFPs are invitations for vendors to submit bids, along with a proposal, which usually includes an overview of the business, a description of the product or services to be provided and other information about the supplying company. RFPs can be as simple as a request to have the vendor company answer a few straight-forward questions, or they can be complex and include questions regarding a company’s financials, history and future growth plans.
As procurement departments grow more sophisticated, RFPs are becoming more complex, too. Typically, the higher the risk, the more investment the company answering the RFP needs to make in its response. One danger in the race to submit RFP answers is that procurement departments these days often demand that suppliers commit to Master Service Agreements before they even submit an answer to the RFP, or worse, they require that by participating in the RFP process the supplying company is consenting to the terms of a template contract, which is non-negotiable. Some RFPs require consent to outside bidding terms, which may not be contemplated by the company answering the RFP.
Before any company submits an RFP, it should understand the terms of the RFP. In complex RFPs, businesses should have the answer reviewed by an attorney, especially when the company inviting proposals attaches a Master Service Agreement to the RFP. By submitting an answer to the RFP, depending on the terms of the invitation, a company may unwittingly bind itself to unfavorable terms and conditions, which cannot be negotiated. Companies invest a lot of time and energy into writing RFPs, but fail to look at the fine print of the bidding process to understand their rights and obligations.
Don’t get caught off guard by an RFP response that may negatively affect the bottom line down the road. Joel Fremstad is an attorney with years of experience in advising clients in RFP writing, negotiation and strategy. Please contact Joel if you have questions on an RFP or other contract needs at 701-478-760 or by email at firstname.lastname@example.org.
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