Vendor disqualifications: why they happen, and what you can do about it
The second instalment of our three-part blog series on the 2019 State of the RFP.
It goes without saying that being disqualified from the RFP process is a bad outcome for vendors. After investing the time and money to prepare a response, it is discouraging to find out that you were not even considered for the RFP award.
However, it’s not all on vendors! Disqualifications are also costly to buying organizations. Given that each additional vendor involved in an RFP increases the price spread between vendors by 3%, each disqualification represents a missed opportunity for savings.
To better understand vendor disqualifications and how to avoid them, we looked at the data from over 6,000 public sector RFPs conducted through the Bonfire Strategic Sourcing platform.
How often are vendor proposals disqualified?
First, the good news: vendor disqualifications are on the decline.
In 2014, nearly 15% of vendor submissions were disqualified. This number is down to 4% in 2018—a significant improvement.
Why are vendor proposals disqualified?
While greatly improved, a 4% disqualification rate is still troubling. To understand how to cut down on disqualifications—and make sure you’re receiving more qualified, complete vendor responses, let’s take a closer look at disqualification reasons:
Many of these reasons may be outside the sphere of influence of the buying organization. After all, sometimes vendors are simply unqualified or careless in their submissions.
However, procurement teams should strive to improve the areas within their control which impact disqualifications: namely, by making the bid and RFP submission process as straightforward and error-proof as possible.
Three keys to an error-proof vendor submission process
Get the right vendors involved.
Want fewer unqualified vendors? Instead, focus on getting your opportunities in front of more of the right vendors. This often means casting a wider net than your local newspaper or business bureau.
By posting solicitations online, you make your opportunities discoverable to a global vendor pool, increasing the likelihood of relevant vendors finding your opportunities. You can also proactively invite vendors by commodity code, further expanding your solicitation’s reach.
Eliminate incomplete submissions with structured online submission.
Fewer and fewer projects are being disqualified due to missing documents (from 30% in 2014 to 13% in 2018). Increased digitization of the RFP submission process is a likely factor. An online submission process allows procurement teams to reduce the opportunity for human error on the part of vendors.
- Checklist-style submission process provides a clear explanation of required documents
- Structured document slots ensure that you cannot submit your proposal until all documents are uploaded.
- Custom fields ensure you get only the data/documents you need (and none of the extra stuff!)
By bringing the bid and RFP submission process online, you can eliminate incomplete submissions, saving countless hours of your time and ensuring that simple errors in the submission process aren’t causing any vendors to be taken out of the running.
Ensure vendors never miss an addenda or clarification.
The solicitation process is often iterative; new information might necessitate addenda or clarifications to be added to the solicitation, and Q&A periods might result in further information to help vendors prepare an accurate proposal.
However, when managing an offline submission process, it’s very difficult to ensure that all interested vendors have received all the relevant information before making their submission. A missing addenda could easily cause inaccuracies or missing pieces in the final submission.
Online submission platforms take away the guesswork for you and your vendors, by:
- Providing all solicitation information, including addenda and Q&A in one, easily accessible online platform
- Automatically notifying vendors of any new documents or information added to the solicitation
- Reminding vendors of the upcoming submission deadline
At the end of the day, these strategies will never result in the complete eradication of vendor disqualifications. After all, there’s always going to be vendors who choose to submit to projects far outside their capabilities, despite your best efforts.
Nevertheless, every procurement professional can take steps to remove process-related pitfalls and obstacles standing in the way of successful vendor submissions—ultimately, leading to better options and better value for your organization.