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RFQs: Achieving a single voice

 July 25, 2017
by Paul Heron

Earlier July posts provided an overview of RFQs, demonstrating a proponent’s capability to complete the RFP phase and contract, and how to show RFQ team alignment.

If you’re not familiar with AFP/P3 projects, please read the posts linked above.

The importance of a single voice response

As explained last week, project sponsors (RFQ issuers) select for consortiums that not only have experience and capability, but are likely to remain intact and aligned throughout the RFP phase and the contract term.

Beyond assurances of unity, backed by a track record and contractual mechanisms, the proposal itself reflects whether consortium members are on the same page.

Strong RFQ responses look and read as if developed by a single entity (which is what the consortium needs to be). In contrast, inconsistent messaging and a mix of structural, writing and graphic styles weaken any claim to a single guiding will and mind.

Components of a unified response

Assess your RFQ responses for the following attributes of consistency:

  • Consistent structure: Structure is the underlying framework behind a proposal section. Although some RFQ issuers provide detailed evaluation criteria that imply a structure, some sections (design approach, operating plan, etc.) may offer considerable flexibility in how to respond. If each major RFQ section (e.g. teaming, design, construction, operations, finance) includes a section on approach, for example, we recommend writing within a common framework. Following a framework can help authors from different companies create content that reflects alignment.
  • Unified messaging: All sections should reinforce the consortium’s strategy, expressing win themes with consistent language and arguments. While every consortium agrees on a set of win themes at kickoff, follow-up is needed to ensure they are reflected throughout the response.
  • Consistent style: Below the level of structure is writing style. Since RFQs are persuasive documents, the language and syntax are often less technical than for RFQs. This encourages team members’ corporate personalities to creep into the writing, affecting sentence and paragraph structure, often making some sections more informal or “salesy” than others. A third party, such as Complex2Clear, can edit these different styles into a single voice response.
  • Uniform quality: RFQs typically include a glossary of “official” terms and titles specific to the project. The consortium needs to go further, creating a proposal style guide of industry-specific acronyms, short forms for team members, the sponsor, reference projects, roles, committees, etc., how to handle the abbreviation in first-instance references, and any other items repeated throughout the response.
  • Unified look and feel: The consortium logo, template and graphics (org charts, charts and tables, illustrations, callouts) need to align to a set of graphic standards across the entire proposal. Aligning to these standards is another logical role for third party support.

Achieving single voice is hard

The effort to complete a compliant and responsive proposal can easily crowd out the items above. Successful consortiums recognize this, start early, and engage the resources they need.

 

Need help winning RFQ competitions?

Contact Complex2Clear

 

 

Photo credit


Paul Heron, MBA, is the founder and managing partner of Complex2Clear, and leads our bid response practice. LinkedIn 

 

 

  

RFQs: Showing alignment

 July 18, 2017
by Paul Heron

Our last two posts provided an overview of RFQs and the key elements in demonstrating a proponent’s capability to complete the RFP phase and, if selected, successfully fulfill the contract requirements.

If you’re not familiar with AFP/P3 processes, please read the posts linked above.

The critical importance of alignment

Beyond technical competence, a consortium needs to create confidence that it will persist through the RFP stage and will function cohesively if it wins the contract.

This is critical to the issuer. A consortium that gets shortlisted and then falls apart due to disagreements, internal issues in one or more partners, financing difficulties, or for any other reason, reduces the competitiveness of the process. If two of three shortlisted proponents drop out, the issuer must abandon a multiyear procurement—a great waste of time and money.

Poor alignment during the execution phase can cause quality, budget and schedule issues—again wasting time and money.

It’s not enough to express confidence that things will go smoothly, based on mutual respect and good intentions. With high stakes and tight schedules ahead, issuers want solid evidence.

Evidence of ability to achieve and maintain alignment

As evidence your team will stay intact and aligned, issuers will look for:

  • Experience as SPV chair: Does the head of the consortium and the designated appointee as SPV chair have a track record of steering similar teams through multiyear projects?
  • Size and strength of SPV members: Are the individual ProjectCo members large, strong companies that can provide equity and guarantees sufficient to attract the needed debt financing? Do they have the resources (people and other) to overcome unexpected setbacks?
  • Corporate relationships: Are any team members related entities? Many P3 consortiums include, for example, a financing entity and one or more construction companies with common ownership. These relationships tend to produce natural alignment.
  • Previous collaboration: Have the same companies collaborated successfully on similar projects in the past?
  • Governance structure: Are the governance structure and processes submitted in the response robust and complete? Has the SPV used the same approach successfully in similar past projects?
  • Teaming agreements: Are agreements in place to clearly identify each member’s responsibilities and decision making authority? Does the response include well-defined dispute resolution mechanisms?
  • Risk management ability: Does the RFQ response anticipate all major risks and explain how they will be managed? Are comprehensive back-to-back contracts in place to allocate risk and minimize stranded risks?

A single voice response is also evidence

Consortium proposals are, by definition, drafted by people in several companies. How do you manage the process to present a single voice response? That’s the subject of next week’s post.

 

 

 

Need help winning RFQ competitions?

Contact Complex2Clear

 

 

Photo credit


Paul Heron, MBA, is the founder and managing partner of Complex2Clear, and leads our bid response practice. LinkedIn 

 

 

  

RFQs: Proving capability

 July 11, 2017
by Paul Heron


Last week’s post provided an overview of RFQs (requests for qualifications). This week we’ll look at the single most important thing an RFQ response needs to do—prove the team can submit a competitive bid (RFP response) and, if selected, perform successfully.

Scope complexity in large AFP projects

Alternative financing procurement (AFP) projects, such as public private partnerships (P3s), typically require the proponent to create a new corporation of joint venture (JV) partners, called a special purpose vehicle (SPV) or ProjectCo. The SPV, together with various subcontractors, will design, build, finance, operate and maintain (DBFOM) the asset (highway, bridge, hospital, etc.), and then hand it back in a specified condition at the end of the operating term. NOTE: Many competitions involve a subset of DBFOM activities.

Therefore, unlike straightforward design-build competitions, DBFOM projects require the proponent (SPV) to also prove a wider range of capabilities—and to demonstrate the likelihood of survival as an entity for the operating term of 20 or more years.

Demonstrating capability

Here’s where the puzzle part comes in. Proof of capability involves linking team members (consortium partners) and key individuals to a common set of reference projects. Many issuers ask proponents to identify up to 10 recent projects (called reference projects) like the one on offer, and then to base their response on those projects only.

Identifying 10 representative projects completed in the past 5 or 10 years and with heavy overlap of SPV member companies and the proposed key individuals can be challenging—especially since they need to demonstrate expertise in creating and managing an SPV, as well as designing, building, financing, and operating and maintaining the asset.

Many projects have special characteristics that further limit the choice of reference projects. These include archeological and/or ecological sensitivity, First Nations and other stakeholder needs and extreme weather conditions, among others.

Finally, a strong local partner with a positive reputation and track record in the project jurisdiction is a must-have feature for consortiums hoping to get shortlisted. 

For our recommended approach to solving this puzzle, see this post on how to manage RFQ reference projects.  See also two posts from last month on selecting key individuals for proposals and recommended practices in proposal key individual resumes.

Creating and maintaining alignment

Because consortiums typically pursue RFQ projects, there is an ever-present danger of partners dropping out. The consortium leader needs to explain how it will keep the SPV together and aligned.

More on this in next week’s post.

 

 

Need help winning RFQ competitions?

Contact Complex2Clear

 

 

Photo credit


Paul Heron, MBA, is the founder and managing partner of Complex2Clear, and leads our bid response practice. LinkedIn 

 

 

  

RFQ Basics

 July 4, 2017
by Paul Heron

Requests for qualifications (RFQs) are typically the first stage in large procurements—especially for alternative financing procurement (AFP), such as public private partnership (P3), projects.

The purpose of an RFQ is to narrow the field of potential proponents to those best qualified. This sets up a request for proposals (RFP) stage restricted to (usually) three proponents with whom the issuer can have structured discussions prior to submission. This process is designed to obtain equally acceptable proposals that compete mainly on their financial offers.

RFQs are appearing as part of smaller procurements

Until recently issuers used RFQs only for very large infrastructure projects. Today, in our home jurisdiction of Ontario Canada, issuers are turning to this model for smaller projects—including a current one for street lighting that is likely to result in a contract well below $100 million, including the cost of a 20-year operating term.

How RFQs and RFPs differ

An RFQ response describes how a proponent will approach a project, while the RFP response sets out in detail how it will organize, design and execute the project, including the cost. So—although often tightly structured—the RFQ narrative is largely qualitative and persuasive. An RFP response, on the other hand is a more quantitative, technical document that includes specific commitments intended to form the basis of a project agreement.

One client put it this way: “RFQs ask us to write billion-dollar best sellers. We don’t know how to do that. The RFP is a design and pricing game—that’s a game we understand.”

Challenges to RFQ success

Two aspects of RFQ competitions help explain our client’s frustration:

  1. RFQ issuers are naturally risk-averse. Unsurprisingly, they want to shortlist proponents with proven ability to succeed. That means teams must not only have had success, as an example, building bridges—but nearly identical bridges in nearly identical circumstances (length, weather conditions, water depth, etc.). And issuers strongly prefer consortium members and key individuals who have successfully worked together on those multiple similar projects.
  2. The RFQ scoring process is often opaque. Because responses are qualitative and unpriced, it’s difficult to challenge a low RFQ score. Debriefs are usually very general, and unsuccessful proponents are reluctant to press for fear of reducing their chances in future competitions. From the issuer’s perspective, one reason for keeping the process subjective may be the long operating terms of many AFP projects. The prospect of a 25- or 50-year relationship tends to make cultural fit nearly as important as technical competence.

This combination of a high bar and a subjective process makes it hard for newcomers to get shortlisted.

Want to improve your chances?

The next three posts cover key success factors for RFQs, beginning with demonstrating capability.

 

Challenged to get shortlisted in RFQ competitions?

Contact Complex2Clear

 

 

Photo credit


Paul Heron, MBA, is the founder and managing partner of Complex2Clear, and leads our bid response practice. LinkedIn 

 

 

  

 

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