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Breaking Trends in the Use of Negotiated RFPs

By Paul Emanuelli

In a recent interview for a feature article by Purchasing B2B editor Michael Power on Procurement Law Trends, I noted that the use of negotiated RFPs has reached an irreversible tipping point across the Canadian public sector, with one-stage “rank and run” negotiated RFPs giving way in recent years to an increasing number of two-stage or even multi-stage “dialogue” RFPs.

These multi-stage negotiated RFPs are becoming particularly common with IT acquisitions and other complex projects where project teams require more sophisticated evaluation formats than a typical one-shot paper-based evaluation. As I’m seeing with increasing frequency in my more complex projects, evaluators often require an interactive evaluation stage with short-listed finalists. After providing active demonstrations and receiving evaluator feedback, proponents are in a better position to refine their solutions when submitting their final proposals. Evaluators are then in a better position to make informed evaluation decisions before they award a contract. This helps expedite final negotiations and increases the chances of project success.

For an example of this growing trend, please see CP24’s coverage of Toronto Mayor John Tory’s recent news conference, where the Mayor announced that Toronto will be replacing its outdated recreational programs registration system using a negotiated RFP that will enable staff to select “the best available technology” for the new citywide system.

As I noted in the Michael Power interview, procurement departments need to “adapt to flexible formats or get left in the dust” since operational departments with pressing procurement needs can easily veer “off the grid” and start improvising with non-compliant procedures if they aren’t getting proper advice on how to use flexible tendering formats. Our Procurement Law Update Case of the Year provides a recent high-profile example of a failed evaluation process using a dialogue RFP and our related recommendations provide some guidelines on how to better manage these complex group-based evaluation processes.

For a deeper look at dialogue RFPs, see our papers on Demystifying Dialogue RFPs and Balancing Confidentiality and Transparency in NRFPs.

While negotiated RFPs help enable competitive innovation, employing them requires strategic execution based on properly informed practices.