Comparing Competitive Bids – Apples to Apples? Kumquats? Asparagus?

By

Barry Braunstein

June 16, 2016

It’s a competitive environment, and many companies seek alternative bids when looking to outsource work. Often times they focus on the fees as the major driver for their decision but as with many things, the devil is in the details. It’s important to ensure that the bids you receive are providing the same solution, not just in the deliverable, but what’s behind it. What follows is a list of questions/things to consider when comparing bids from various service providers (note that some of these questions are applicable to consulting services beyond design/engineering). The assumption here is that you’ve already looked at the firm’s experience and capabilities, and have concluded that they seem to be a good fit, at least initially.

1. Does the individual/firm demonstrate a clear and in depth understanding of the problem(s) you’re trying to solve? While the issues you’re looking to solve may be unique, how well a firm demonstrates an in-depth understanding of the challenges/risks of your program, and what their risk mitigation plans are can provide insight into how much they’ve really thought about and understand the program, and how realistic their schedule and costs ultimately will be.

2. What is their (design) process, and how does it minimize risk? Most design consulting firms will talk about an “n” step process, starting with defining the customer requirements and moving towards increasing levels of implementation detail, from architecture to detailed design to prototyping. But what happens inside each of those phases can often make the difference between success or failure, or meeting schedule vs. not. For example, what kinds of checks and balances do they have during the design process (formal peer reviews, senior technical management oversight, regular/timely customer reviews, etc.)? How will they work with you? How often will you meet? What will be discussed? What will they need from you in order to be successful? How will decisions be made and when? What data will be provided in order to facilitate those decisions?

3. If you’re designing a product that will be ultimately be manufactured, how does their process mitigate risk that the resulting manufacturing (COGS) costs will be in line with your expectations, and indeed that the resulting product/work can be manufactured? What relationships does the firm have with suppliers and contract manufacturers to support your short and long-term requirements? What capabilities/experience does the firm have in assisting you with the transition from design to manufacturing (something that is very often overlooked)?

4. How do the financial aspects of the various proposals compare? Are some of the proposals fixed price vs. time and materials (note that it is somewhat in the vendors’ best interest to quote a lower end of a T&M estimate, since the risk is on the client, not them, and you’re not likely to change vendors mid-stream if/when a project is exceeding estimates; of course, the longer term relationship may suffer – or maybe not…)? What are the assumptions that go along with the bid (and if they’re not spelled out and clear, that should be a giant red flag!) and are they realistic/in alignment with how you view the program? Is there a timeline and associated deliverables/milestones associated with the proposal/program, and do they make sense?     A lack of detail here could indicate a real lack of in depth understanding of what it takes to have a successful program – not a good way to start things off.

5. Finally, how will the overall relationship be handled throughout the project? Who will be your primary point of contact? How are things handled if there     are issues with the program/team? Is there a defined escalation path? Who is responsible on the vendor side for the overall relationship with you (and you them)?

Apples to apples, or Kumquats? Be sure to really compare what you’re getting.

About the author

Barry is responsible for Acorn’s sales and business development activities in the eastern United States.