When issuing a request for proposal (RFP) for a service trade like snow removal or landscaping, there is a tremendous amount of energy spent on the scope of work, as this becomes the benchmark for how pricing will be derived from your bidders.
Once created, you decide on a pricing model (per service or seasonal) and then typically an RFP is issued. But there is something missing. What are your bidders bidding on?
They know by the scope how often they have to mow the grass, whether they're required to mulch and at what depth. But what is rarely shared in a national RFP is how much grass there is to mow or how much mulch needs to be put down.
Do you know the size of your properties, how much turf you have or how large your beds are that need mulch? Your answer might be no, but you figure the bidders are the expert so they should know — or know how to determine it.
You might be partially right. Certainly, any national landscape company should have the technology to gather that information on a site-by-site basis and use it as a baseline to prepare their costs. But no technology is perfect, and more importantly, the technology is only as good as the information the bidder has as to what to measure. Let me explain.
You issue a 100-location RFP. You provide full addresses of your properties so the bidders know what to look for. They start their due diligence and begin to measure the site-by-site metrics they need for preparing their bid.
They use their state-of-the-art technology to pull up the first site and already there is a decision to be made. There is a field behind the building. Is it the client's responsibility to mow? Is it at the same frequency as the rest of the turf?
What about that tree line that borders the east side of the property? Will the bidder be responsible to trim those or are they the neighbor's property? What about the 200 feet of turf between the walks and the street? Is that the municipality's responsibility or the bidders? Is there an active irrigation system? Technology won't tell you that.
What happens next? Unfortunately, in a normal bid, assumptions will be made. This is only property number one. What about the next 99, or in some bids the next 499? Or more?
Time is of the essence in these bids, especially for the bidder when only a limited amount of time is provided to determine this information. So the bidder will make guesses as to what is or is not included and move on to the next property. But if you have a short list of five companies bidding, there is a chance they might make five different calls as to what is and what isn't included.
What do you hope for here as the client? You know your pricing might end up looking different across all five companies. Your low bidder likely determined they weren't trimming those shrubs or mowing that field and your high bidder did. What about the other three companies? Most likely somewhere in between. Five different perspectives as to what needs to get done and five different prices for those services.
So after all of that investment of time and energy in building a scope of work, building out a pricing sheet and attempting to set the standard on expectation, it comes down to what each bidder decided they needed to service. Not exactly how you drew it up I am guessing.
How does this shake out once you award that low bidder? They begin to service, ignoring what they already decided was not theirs, and the complaints will begin to roll in from the field.
If this was only one site out of a 100, it wouldn't matter. But now it's cropping up all over your portfolio. You want your supplier to service at the price they bid, but their price doesn't begin to cover what needs to be done.
So what ends up happening? There are two options.
Option 1: You decide to collect pricing from your awarded supplier for all of the unidentified areas of the initial RFP and review their numbers. However, the likelihood is that they are no longer the low bidder and sometimes might become the high bidder.
But what do you do? Change out the vendor 45 days into the transition and the landscape season? That doesn't seem like an option, with no guarantee this won't be an issue with your next low bidder. You have a dilemma.
Option 2: Tell the vendor there will be no price increase, and they need to just service all areas being identified as part of your portfolio. Seems like a good idea in theory, but we all know what the end result will be.
Your supplier now needs to make a choice. Service to expectation and lose money or make money and cut some corners. How do you think this will play out?
Both of those options are pretty lousy. So what's the answer? The real answer is to avoid this altogether. There are two ways to accomplish this.
The first is to provide detailed site maps of each and every property, identifying what is and what isn't included to be serviced. If you have these, great. You're ahead of about 95 percent of the market. For the rest of us, there is another option.
What if you could provide every bidder with the metrics they needed to bid? Square footage of turf, square footage of beds, linear feet of shrubs, tree counts (both under and over 12 feet), palm tree count (where applicable), number of islands for mowing, square footage of the lot and sidewalks (for weed control and blowing of the lot which is included in many scopes), length of any fence lines and other key metrics.
What if you provided this to every bidder prior to them setting their pricing?
The short answer is this problem not only goes away, you are now able to focus your due diligence not on if the pricing is accurate but how the bidders are structured to support your portfolio. Pricing becomes a nonissue, in the sense that you now know you have an apples-to-apples bid.
How do you go about collecting this data? We are seeing the beginning stages of a trend in the industry where clients, for a minimal fee, are selecting one company to gather this data for them and then providing this data to all of the bidders.
It evens the playing field, and more importantly ensures that once a decision is made and the portfolio awarded, a smoother transition occurs. There will be significantly fewer issues of service areas rising up.
At the end of the day, your goal is to select the most qualified supplier or suppliers to support your portfolio. By reducing variance through better bid preparation and bid data, you can focus your energies onto the things that truly matter in a sourcing event of this kind, which is often making a transition to new suppliers as smooth as possible for your sites.
Selecting a qualified partner is just that — finding a partner. The most successful consolidated programs I have seen are those where there is a high level of partnership between client and service partner.
Both sides should have the same goal: building out a solution that works for all parties and is sustainable over the term of the contract — and beyond hopefully. Successfully engage your service partners in a solution, and you will see the results you are hoping for.