Fleet Financials - Current Articles

May 2009, Fleet Financials - Feature

Evaluating RFPs: Choosing the Best Supplier

Effective use of a formal request for proposal (RFP) can help fleet managers ensure they’ll select the best supplier. The process begins before the RFP is even sent out.

By Staff

ARTICLE TOOLS        | E-MailPrint Subscribe

It has become the standard method of choosing suppliers: the formal request for proposal (RFP). Gone are the days when the veteran fleet manager simply called known suppliers and asked them to “send me a proposal.” Today, strategic sourcing is more commonplace, and fleet is viewed not as merely a function, but also as “spend” — expense that can be leveraged into better pricing and savings for the company.

Fleet managers, unfortunately, sometimes feel left out of the process. Sourcing and purchasing professionals have their own way of doing things, and in many cases, it isn’t the way with which fleet managers are familiar. How can a fleet manager ensure the process works for all? How do fleet managers make certain they don’t get “stuck” with programs and suppliers that don’t fit their needs? The following ways can  help avoid the sourcing/purchasing trap and make RFPs work for fleet.

Using a More Formal Process

In the early days of fleet management, fleet managers both suffered and benefited from a relatively low profile in the company. The fleet manager was the “car guy,” sometimes viewed as little more than a mechanic wearing a suit. As the profession matured, fleet managers became more vocal in seeking recognition for their contributions to the company and with that came greater scrutiny (not entirely a bad thing).

At that time, the formal RFP was the exception rather than the rule when choosing fleet suppliers. Fleet managers were visited regularly by representatives of all manner of suppliers. When the time came for a change, it was merely a matter of picking up the phone and asking for a proposal. Not any more. Companies have become far more serious in managing suppliers and negotiating the best deals possible by including fleet “spend” with a number of other expenses.

The result? While fleet management has always been every bit as serious an undertaking and every bit as professional, the process of sourcing was admittedly more casual. Not so with purchasing and its latter-day offshoot, strategic sourcing. Buying shop supplies or choosing a vendor for quarter-inch metal screws is a formal process, involving formal requests for proposal from potential suppliers and a formal review and analysis process initially alien to fleet managers.

Understanding Purchasing RFPs

The purchasing function is self-definitive; purchasing is, well, purchasing. The purchasing department’s job is to find a supplier for a commodity, service, or piece of equipment, generally at the lowest price (although other factors, such as ordering process, shipping times, etc., are considered).

Purchasing RFPs is usually geared toward the purchase of things, rather than services, and if purchasing requires a fleet manager to use a particular RFP format, some adjustments are usually useful:

■ Pricing. Commodity and product pricing is often expressed in “units” and “price per unit.” If the RFP can be altered to ask for pricing as usually expressed in the fleet industry (fee per vehicle per month or transaction fees for services, for example), or in a generic “price” request, confusion with bidders can be eliminated or eased.
■ Language. Delete language regarding “shipping” or “packaging.”
■ Warranty/Guarantee. Adjust warranty or guarantee language to fit the fleet service sought.

A purchasing RFP can be edited to be more “service-friendly.” If nothing else, this step helps reduce the number of questions bidders ask in the pre-bid process.

COMMENT ON THIS STORY

Please log in to write comment.

New user? Sign up for new membership now!

ARTICLE ARCHIVE SEARCH

Flexible & Powerful Fleet Software
Chevin fleet management software - Where flexibility comes standard. Solutions for all types of vehicle and transport operations. Click Here.

BLOG

Market Trends

Mike Antich
Do You Know What Your Drivers Are Really Doing?

By Mike Antich
Do you really know who is driving your company-provided vehicles? Often the "at-work" persona of an employee is not the true indicator of their behavior when no one is watching. Recently, someone forwarded me a link to a chat room for pharmaceutical reps. I did a search of posts that included the phrase "company car" and, in short order, I was shocked at some of the comments written about their use of company cars and how drivers play "the system" to their advantage.

The Need to Extend 50-Percent Bonus Depreciation

By Mike Antich

Coach’s Blog

Ed Bobit
NAFA’S ‘New Look’ Good, But Needs More to Win!

By Ed Bobit
The expressions related by NAFA members to me and to our editorial and marketing staff have been encouraging with the introduction of new innovations these past few years. Members are reluctant to be quoted or to put their opinions on paper or to e-mail them to anyone, but we keep track.

Mobile High-Tech: Driver Convenience or Corporate Liability?

By Ed Bobit

Fleet Job Finder


Save time and money. Search for fleet jobs. Advance your career. Access our career coaching services

Job Seekers

  Post your resume & manage your job search.

Employers

  Post jobs & search top quality resumes.

Featured Jobs

STORE

$10.00

Fleet Financials - September/October 2009

In This Issue:
Here are some of the Highlights

  • Nestle´ Bolsters Fleet Value by Improving Processes and Leveraging Size
  • Does LIBOR Still Correlate to Corporate Borrowing?
  • Telematics: No longer Just a Dot on a Map
    And much more…