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We often get asked to submit responses to RFPs (Requests for Proposals).  These require elaborate responses demonstrating all of our capabilities, while giving a proposal for General Conditions and fee.  Most RFPs state the most qualified contractor (which is unquantifiable) will be hired, and that the numbers (which are quantifiable) are not as important.  But in reality, most contractors can put together a terrific looking capabilities package so the numbers are what become important. This requires contractors to do two things that are not in their client’s best interest:

• Reduce staffing levels and expense to an amount that does not allow the contractor to serve the client’s best interest.
• Reduce proposed fee to an amount well below overhead to get the job.  Because no business can lose money, they are then forced to have hidden mark-ups, or make it up in some other way down the line.  This creates hidden agendas, conflict, and misaligned interests.

Because of the risk associated with the significant developments our clients have, neither of these issues are in their best interest.  Larry Dillin, probably the largest developer in the Toledo area, and a bright guy, approaches it another way.  He uses RFQs (Requests for Qualifications) and selects the best firm for whichever particular project he is doing.  Then he negotiates fair General Conditions and fee, knowing that this will give him the best contractor, who has the resources and aligned interest to properly take care of him and the project. 

We don’t often respond to RFPs.  It is against our Core Purpose and Values to not work in our client’s best interest and with integrity.  Though the entities asking for RFPs are quality organizations, they just don’t understand the impact this has on creating an important relationship that serves their interests best.