The Request for Proposals and the
Platypus: what do they have in
common?
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Welcome
Part A – RFPs
Part B – Winning Proposals
Michael Asner Consulting
Suite 210
15233 Pacific Avenue
White Rock, BC V4B 1P8
Canada
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Procurement is a Zoo!!!!
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Emergency!!
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Sole Source
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Tender
 RFQ
 ITB
 ITQ
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RFPs……
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When to Use an RFP
 Competition
 Selection on more than price alone
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A World Wide Trend




FAIR
OPEN
TRANSPARENT
BEST VALUE
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fair
• adjective 1 just or appropriate in the
circumstances. 2 treating people
equally.
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open
• adjective 1 allowing access, passage,
or view; not closed, fastened, or
restricted.
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transparent
• adjective 1 allowing light to pass
through so that objects behind can be
distinctly seen. 2 obvious or evident.
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best value
???????
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What the Courts Have Said
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DUTIES on OWNER
Duty
Duty
Duty
Duty
Duty
Duty
to
of
of
to
of
to
disclose
Care to Prospective Bidder
Fairness
Award as Tendered
Fair Competition
Reject Non-Compliant Tenders
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Canadian, eh?
Once you establish Contract A,
Negotiations are Not Allowed!!!
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First, the Road Well Trodden: Contract
A RFPs
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Our Message is Simple...

 Contract A does not apply to all RFPs
 You can negotiate within the RFP process,
provided you set it up that way
 Negotiations produce more value and reduce
the risk
 Many RFP problems can be avoided if you
avoid
Contract A
 Fairness is always something to strive for
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Contract A Doesn’t
Always Work!
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The Contract A/B Legal
Framework
 The approach was defined in 1981 by the Supreme Court
of Canada in its decision in R.(Ont.) v. Ron Engineering
[1981] 1S.C.R. 111
 Most RFPs in Canada introduce the Contract A Contract B approach – this is not a legal requirement,
but many people have assumed it is
 A key legal issue upfront when starting to draft an RFP
is to decide if the procurement process will be legally
binding or non-binding
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The Contract A/B Legal
Framework

Ways to introduce Contract A?
 Through express language (as long as the substance
of the RFP supports the language)
 Through the RFPs’ requirements (hallmarks), such
as:
 Is there a bid security?
 Are the bids irrevocable?
 Is the pricing submitted negotiable?
 Is a comprehensive draft agreement attached?
 Are the terms of the agreement negotiable or
not?
 Are there instructions about amending proposals?
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The RFP Process (5 Steps)
Step 1
Creating the Statement of
Work
Step 2
Involving Procurement
Step 3
From Issuing the RFP to
Closing
Step 4
Evaluating Proposals
Step 5
Finalizing the Contract
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Fatal Flaws with the Contract
A/B Paradigm
1. While negotiations are not permitted, they often occur,
except that pricing is rarely touched (when it should
be) and the vendors’ price premium stays in
2. Often mediocre proposals are accepted since the only
alternative is to start again
3. Change orders compensate for the inability to change
the Statement of Work that is part of the contract.
4. So you award a contract for $1million and you know
you will have change orders for $200K to account for
the shortcomings of the rigid RFP process
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Negotiated RFPs
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The RFP Process (6 Steps)
Step 1
Creating the Statement of
Work
Step 2
Involving Procurement
Step 3
From Issuing the RFP to
Closing
Step 4
Evaluating Proposals
STEP 5 NEW
Negotiations
Best and Final Offers
Step 6
Finalizing the Contract
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Negotiations
Best and Final Offers
STEP 5 NEW
1.
2.
3.
4.
5.
6.
What is BAFO?
What is the law?
How does it work?
Who uses BAFO?
Why is BAFO not used more often?
What are the benefits of using BAFO?
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1. What is BAFO?

It’s a technique designed to improve the
quality of parts of the proposals and the
pricing, or just the pricing

In the world of Contract A, this would be
called “bid repair” or “bid enhancement”, but
we are purposefully not in a Contract A
environment

Still, we want transparency and fairness
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2. What is the Law?
1. Any legislation in your own
jurisdiction?
2. At common law, the courts never
made the use of Contract A/B
mandatory?
3. Even in a Contract A/B context, you
could reserve a right to conduct a
BAFO
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3. How does BAFO work?
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A Specific Example from Alberta
 Alberta’s Rules for BAFO
1) Identify BAFO in the RFP
2) No disclosure to vendors
3) Only one BAFO round
4) Only short-listed, fully compliant vendors
5) Standard invitation to BAFO
6) Initiated by the Procurement Officer
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Montana’s Rules
Best and Final Offers (Optional Step)

The committee may decide to seek best and final offers
from one or more offerors if additional information is
necessary or responses will be altered in order to make
a final decision.

The committee may request only one best and final
offer.

Offerors may not request an opportunity to submit a
best and final offer. The procurement officer must be
notified of the offerors who are provided the opportunity
to submit best and final offers and the areas to be
addressed.
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Montana’s Rules
Best and Final Offers (Cont’d.)
 The procurement officer will send out the request
for best and final offers in a letter stating the
areas to be covered and the date and time in which
the best and final offer must be returned.
 Proposal scores are adjusted in light of the new
information received in the best and final offer.
 A best and final offer cannot be requested on
price/cost alone unless so stated in the RFP.
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4. Who Uses BAFO in Canada?

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City of Surrey
City of Toronto
City of Winnipeg
Government of Alberta
Government of Ontario
Ontario Hospital Association
Government of British Columbia
Humber River Regional Hospital
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The Negotiation Process
1. Preparation
2. Fact Finding
3. Bargaining
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5. Why isn’t BAFO used more
often?
a) Some public agencies are not be aware they can do it
b) There is a perceived lack of legal authority for BAFO (the
misconception that negotiations are always prohibited)
c) Sometimes management doesn’t want the agency to do
it (for their own reasons)
d) Some procurement people prefer to avoid negotiations
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Negotiations Can Be Scary!
 Many procurement people receive
little if any training.
 The supplier is better prepared.
 Roles and responsibilities are poorly
defined.
 Many people find negotiations
awkward.
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6. What are the Benefits in
using BAFO?
 Increase the number of high-scoring proposals
(providing greater competition).
 Reduce risk to both parties.
 Eliminate unnecessary costs.
 Reduce costs.
 Improve benefits (better quality, performance,
delivery etc.).
 Identify alternative solutions not initially apparent.
 Clarify requirements and proposals.
 Create better understanding and relationships
between the parties.
 Improve the contract.
 Improve the proposal.
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Conclusion
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Negotiated RFPs
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Conclusions
What have we learned???
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Thank you.
Michael Asner
604/530-7881
[email protected]
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