RFP responses can seem complex and intimidating, especially to the uninitiated. Simplify the task by dividing and conquering. After all, there are only four kinds of content in proposals. Herewith, some notes on financial content: what drives the requirement, what it looks like, and where your focus should be.
Where Does the Requirement for Financial Content Come From?
There are two underlying drivers for financial-content requirements:
- To verify that all elements of a bidder’s technical and management proposal have been included in their quoted price
- To assess whether a bidder has made unreasonable assumptions that could drive either “excessive” cost/margins, or a risk of non-performance
What Kind of Financial Content is Required?
Every RFP requires a price to be included for the goods and services as the bidder has offered them in their proposal:
- One price for the whole shebang, or
- One price that varies with the volume or scope of work (e.g. unit pricing of goods; hourly labour rates), or
- A combination of these – one price for the Work as scoped in the RFP and variable pricing for additional Work that might be required
Some RFPs also require bidders to identify the following items:
- Type of cost escalators used or proposed throughout a contract term
- Assumptions that underlie the price
- Things specifically excluded from the price
Even if these additional items aren’t required for proposal submission, they make valuable notes for the proposal manager and the executives (to negotiate a contract) and the operator or project manager (to deliver the Work).
Where Should the Focus be for Financial Content?
There are two things to consider:
- Achieving presentation clarity and compliance with all RFP instructions
- Getting the price as low as reasonably possible
As a general rule, the low price will win the bid. If the company want to propose a solution that exceeds the requirement, the extra should be priced separately as an option.