May 2009, Fleet Financials - Feature

7 Questions to Ask Before Issuing an RFP

Going out to bid for fleet services isn’t an end unto itself; nor is it a process to just “see what’s out there.” Don’t waste your or a supplier’s time. Ask these key questions before sending out an RFP.

By Staff

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More and more, the issuance of a formal request for proposal (RFP) is often preceded by a formal request for information (RFI) in the process of choosing a fleet supplier. Years ago, the process was more informal; the fleet manager knew who the “players” were and if there was the need, simply asked for a quote. “Send me a proposal” was a commonly heard phrase.

The growing influence of strategic sourcing, purchasing, and procurement is no small part of the change, and fleet managers are often relegated to a supporting role in the process. RFPs can be a useful tool in selecting suppliers, but they can also be a waste of precious time and resources if improperly used. Fleet managers should ask the following seven questions before starting the process.

1. Why an RFP?

Common sense suggests before initiating any formal process, the fleet manager must know and understand exactly why it’s being done. Fleet RFPs are used for a number of reasons:

■ Company policy. Going “out for bid” for essential goods and services on some regular schedule is policy for many, if not most, companies.
■ Problem with existing supplier. Sometimes, problems and issues with existing suppliers become intractable. Solutions cannot be found or agreed upon, and the relationship simply doesn’t work.
■ “See what’s out there.” Curiosity or simply to catch a better deal if it’s there.
■ Bundling/Unbundling. Bundling an unbundled program, or vice versa, for price or other reasons.
■ Outsourcing. A decision to outsource the function, either administratively or in its entirety.

Some reasons are better than others. Seeking new suppliers because of problems with existing ones is certainly necessary, if the problems are long-term and solutions are elusive. Casting about in the mere hope of stumbling on a better program is not a good use of precious resources and time, for either the company or suppliers.

Knowing the purpose of the RFP is the first step in making certain the process will be useful.

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