Should Small Businesses Answer RFPs or Not? That’s the question — Part 1

If your business is smaller than 3 people you face a whole variety of issues when making this consideration.  I’ve devoted three blog entries to discussing this issue because it will arise at some point in a small businesses’ life span.

To hear some people talk about it, government RFPs are a godsend to small businesses.  My answer: Not exactly.  Here’s a link to an article on BNET (which is a great source in general for small businesses) that covers the topic. Read all the comments below it as well as they point out many issues surrounding government RFPs.

www.bnet.com/blog/smb/ask-the-experts-should-we-go-after-rfp-contracts/4784?promo=857&tag=nl.e857

Here’s Holtzman Communications’ experience on this topic:

Holtzman answered an RFP a while ago, and made the first cut to the interview stage.  One of the first questions Holtzman asked was, “is there an incumbent, and if so, are they applying, or if not, what happened?”  The government agency refused to answer the question.  Holtzman wound up winning the contract — $100,000 over a three year period.  There was a clause in the contract saying that the agency didn’t need to spend the amount allotted. And that’s exactly what happened.  Holtzman wound up billing approximately $5,000 out of that $100,000 contract over the three year period.  If there was an incumbent, they now knew what happened to them. Furthermore, the agency told the company not to plan vacations for that August because they were sure a huge amount of work was going to happen.  Not a dollar’s worth of work came through that month.

The government frowns upon this kind of behavior on the part of its agencies.  Clearly, the agency didn’t care about wasting their own time, but this was a time and money expenditure for Holtzman that could have been put to better use.

 

Sandra Holtzman teaches CEO 035: Licensing.