A NEW SERIES ON RFPs, CAPITAL PLANNING, AND PUBLIC/PRIVATE PARTNERSHIPS
This is the first in a series of articles by Neil Calfee. Currently the principal of NPC Group, specializing in the creation and negotiation of public/private Partnerships, Neil Calfee previously served as Arizona State University’s director of real estate development. He has over 15 years of experience in development and management of complex development projects involving partnerships between government entities and the private sector.
This article reviews 5 mistakes institutions commonly make in writing an RFP document. Calfee’s next article will review 5 frequent mistakes made in the solicitation and evaluation of responses once the RFP has been issued.
You may also be interested in his recorded training, “Creating Financial Expectations in the Housing RFP Process.”
So you want to issue an RFP for a campus capital project, how hard can that be?
Quite easy, actually. But simply getting an offering on the street and administering a successful RFP process that brings you a quality development are two different things entirely. Here are 5 things that many institutions miss in their RFP processes: 5 mistakes that can cause annoyance at best or can completely derail the effort at worst.
Mistake 1: Not Doing Your Homework
Do you know what it is you really want? If you do, do you have support from the administration? How about the key stakeholders who will be part of this process and who will operate whatever is built?
In many cases the answer is ‘No’ and the RFP never sees the light of day – or it ends up in a stalled out process because the administration gets cold feet.
So, find an example of the project you want on your campus and go visit it, talk to those that operate it, find out who built it and designed it, and talk to them. Then, if you’re still enamored with that project, pack your key people into a plane, train, or automobile and take them to see it, and hopefully appreciate it, as much as you do. Your odds of a successful RFP outcome will be exponentially higher if the right people in your organization are supportive and comfortable.
Mistake 2: Not Getting the Timing Right
Don’t issue an RFP on November 1. Why? The holidays, of course. You can’t expect anything to get done (or at least done well) between Thanksgiving and New Year’s. There’s no worse time of year to keep a team focused than around the end of the year holidays – and by ‘team’ I mean your team as well as the potential respondents.
Can you have a successful RFP process around the holidays? Yes. But you will increase the odds of a favorable outcome – and spare yourself and your bidders a lot of stress – if you can avoid this time of year.
Mistake 3: Falling for the Pretty Picture
Any developer can find an architect to produce a drawing or plan that is dynamite, but that doesn’t mean they have the experience or capability to build what’s in that pretty picture! Do not get taken by the fluff; tear the pictures out of the response and put them in a drawer. Then, and only then, should you be evaluating that response.
Also keep in mind: plans will inevitably change, and what’s built rarely ever mirrors what’s proposed in the RFP response. Certainly pay attention to the design credentials that are part of the team, but know that whatever design they offer is far less important than the overall capability and experience of the development team.
Mistake 4: More P’s than Q’s
How do you avoid the Pretty Picture trap? Focus on Qualifications rather than Proposals. Because finding the right team who has the knowledge, experience, and financial strength to execute on a plan is far more critical than the plan itself, you may want to consider the issuance of a Request for Qualifications rather than a Request for Proposals.
When you do this, the pretty pictures you receive are of things that have actually been built – which give you far better intelligence about that respondent than a conceptual design for your campus.
And if they haven’t built anything? That certainly tells you something too.
Mistake 5: When ‘War and Peace’ is shorter than your RFP
It’s so important to get to the point:
- What type of product are you looking for?
- What kind of deal are you willing to entertain?
- What are the desired qualifications of your potential partner?
That’s about all you need in a good RFP/Q.
An RFP should be as concise and clear as humanly possible. There is no rule of thumb on length, but you should be able to hand your RFP to someone who has no experience in this arena and they should be able to read it and summarize back to you what you are expecting in a response.
If you’re forced to include a bunch of legalese, put it at the end. Conversely, if there’s something that’s buried within the legal language that’s required to be done by a respondent, pull that out and get it to the front of the document and highlight it.
There should be no surprises or ‘Gotcha’s’ within your offering documents!
It’s certainly up to the respondents to read the offering documents and understand the requirements, but there are cases where the inevitable boilerplate disclosures include some form of acknowledgement by a respondent. Make sure that this, and additional acknowledgements or signatures, are clearly called out. You don’t want to derail your process because of a technicality.
Watch for the Next Article
We just reviewed 5 too-common mistakes made in preparing the RFP document. The next article in this series from Neil Calfee will review 5 frequent mistakes made in the solicitation and evaluation of responses once the RFP has been issued.
We also recommend Neil Calfee’s prerecorded training, “Creating Financial Expectations in the Housing RFP Process,” which covers critical considerations to ensure the viability of your institution’s residential P3. Through the context of a successfully executed RFP, Neil Calfee will walk through:
- Establishing stakeholders in the P3 planning process
- Setting a scope for your RFP
- Creating financial parameters around debt coverage ratio