We have all managed Procurement projects where a RFQ/RFB went to a number of suppliers and then we had to decide to award the contract to one bidder and not the others. Next step is you communicate the decision to the non-winners. Invariably you will get asked to give feedback as to why that or the other company did not win.
It is important to give or offer to give feedback to the non-winners.
Reasons for feedback are numerous, but I shall put the top 5 here:
1. Respectful business practice. It is respectful to thank the bidder for their bids and to let them know why they did not win.
2. Time and Cost. There is cost to the bidding company for the time it took for them to prepare the bid and the cost of putting together that bid.
3. Bidders are people too. If you go out on a date and you decide that this person is not for you, you won’t just leave them hanging not knowing why you didn’t chose them. Telling why helps them to close that chapter of their dating lives. The same holds for Bidding competitions
4. Closes the circle. Like reason 3, Bidders need to know what they could have done differently or perhaps improve for the next time.
5. Leave them with a good impression of your company. If Bidders are treated badly or fobbed off, then they will have 2 actions: 1) they won’t bid for more work from your organization for which they might well be the best supply partner out there, 2) everybody knows everybody or at least someone who knows someone. If you behave badly, then others in the industry will hear about it and may not want to deal with you in the future, again cutting off a potential key supply partner.
Most Procurement people do not know how to give feedback and will ignore the bidders’ question and hope they go away. A way to avoid the headache or Fear of giving feedback is the Weighted Scoring Matrix. Some might consider this Old Skool, but I still use it because it works. And here is why.
1. A Weighted Scoring Matrix is a Collaborative activity undertaken by the Key Stakeholders/Budget Holders and their Support Function – Procurement. This means that Procurement has the opportunity here to help their Stakeholders realize how intricate and delicate an RFP process really is. Additionally, if your Stakeholder is part of the decision-making structure then in the future they can’t blame Procurement for making a decision that they did not agree with. Remember we are doing it For and With them, not To them.
2. A Weighted Scoring Matrix helps all parties (all functions from Legal, Information Security Risk, Shared Services, Marketing, etc.) crystalize what is most important to them in the responses back from bidders. The Weighted Scoring Matrices come into their own here because there is no horse trading happening post receipt of RFP and also no colluding between departments to get more say in the outcome or the “if you back me on this, then I shall back you that”.
3. The WSM is for all intents and purposes Objective and therefore when the answers come in there is no more “I like their presenter better therefore I am going to give them higher points”.
4. Everyone involved in the decision gets to “Do” something. Often the project is agreed and then everyone gets so busy that it is left up to Procurement to run the whole project with no support from the other functions. Here you are able to garner help and support from the Stakeholders without having to make decisions for them which might come back to haunt you. They know their input and work to deliver the project are important, so they will turn up.
5. When it is time to feedback, you can deliver a shortened version of the WSM with some specific examples as to where the bidder had lost points and where they did well. Once the hard bit of formulating the WSM is done, then feedback should be as easy as ABC.
My advice is to schedule a Feedback session when your Key Stakeholder can make it and invite them to the Feedback session. Go over the “script” with them beforehand, but let them give the bidder the feedback message. 2 Things are happening here. One, you (Procurement) step back into support function mode to and let the Key Stakeholder “Own” the decision which makes it easier for them to implement. And two, your function remains the “Neutral” party and the bidder will know that Procurement and the Key Stakeholder sing from the same hymn sheet so can’t use either the Key Stakeholder or Procurement to overturn the decision.
See, not so hard to say” No”, but there is an Art to saying so.
