Don't Send Your RFP to Too Many Suppliers

Considering the above factors, when the anticipated spend warrants a competitive RFP, the number of invited suppliers candidates can run from a low of two or three to as high as seven or eight (for a very complex and expensive project). The chart below illustrates (figuratively) how project complexity and dollar value can influence the ideal number of candidates to invite for an RFP. This, of course, may vary by industry.

Only very rarely would we send out RFPs to as many as six or seven suppliers, and the complexity and/or price of the project would justify such a large amount. Even that many responses can be effectively evaluated in eight to 12 hours, an amount that shouldn't overburden the evaluation team, but still enough to get a good range of quality responses. The team will maintain concentration on each response instead of simply skimming what the supplier proposed. This will result in an increase in the quality of the evaluations. It will not burn out your suppliers. Suppliers will submit higher-quality responses because they know that they have a solid chance of winning your business.

At the same time, you save your organization hours of internal resources while improving its reputation. We figure that by properly vetting candidates for receiving your RFP, you can decrease the number of hours invested in evaluating the RFP responses by about two-thirds.

Just remember, more doesn't always mean better.

George Bordon is president of PSM Advantage, a procurement and supply chain training and consulting company. Steven Jeffery is a senior consultant. They are co-authors of the book The Art of Creating a Quality RFP, from which this article is adapted. They can be reached at info@psmadvantage.com.

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This story, "Don't Send Your RFP to Too Many Suppliers" was originally published by Computerworld.