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The Bottom Line on RFIs: Why Companies Should Respond

May 15, 2012
By Maryann Lawlor, SIGNAL Connections
E-mail About the Author

They take time, money, staff and expertise, and in the end, they may not even pay off—and if they do, the profit margin may be very small compared to other projects. Despite all of this, one expert believes that responding to requests for information (RFIs) is actually one of the best ways companies can influence government acquisition.

Matt Thornton, senior vice president, SM&A, a government procurement consulting firm, admits that shaping acquisition is no small feat, so companies must determine if it’s worth the investment. Responding to an RFI is less about responding and more about preparing—as much as nine to 36 months before a request is even announced, he says.

Thornton offers these tips to companies thinking about entering the business-to-government environment:

*Develop a corporate strategy months before entering the government acquisition space or an RFI announcement relevant to your company is released.

*Understand the profit margins in government work. Don’t expect 30 percent to 40 percent margins.

*Know how to respond, how your competitors will respond and how to open a dialogue with the government to influence an agency’s IT requirements. This activity should be a partnership not a sales pitch.

*Educate government procurement personnel about current technological capabilities; these explanations craft realistic expectations.

*Be willing to challenge government organizations that seek a 100 percent solution. Explain why an 80 percent solution will meet their needs and how, over time, you can mature your offerings to meet all of their requirements.

*Learn the government’s reporting requirements and acquire all certifications that agencies demand.

*Decide if you can fulfill a contract’s specifications alone or if you will need to establish partnerships with other companies.

*Determine what information you will and will not include in response to RFIs.

*Create cost estimates. Can you do the job at the price point and still make money?

*Be willing to terminate your pursuit of a contract when you’ve determined your solution is not what the agency needs.

*Structure a gated process to estimate the probability that you will win the contract. If low, stop pursuing—and spending money on—it.

Thornton also offers government agencies some advice about how to encourage companies to respond to RFIs and RFPs.

*Educate companies about how to have a dialogue with acquisition officials and how to influence requirements.

*Walk the talk. Award contracts to vendors that offer 80 percent solutions.

*Help form partnerships between companies. A newcomer to the government space may be able to enhance the capabilities a current contract holder already is providing.

*Minimize government reporting requirements.

*Allow companies to retain intellectual property rights.

Government agencies are hungry for businesses to respond to RFIs, and the steps Thornton recommends certainly can help the process along. Today, pursuing government contracts is an effort that requires companies’ CEOs and CFOs to ask: “Is it worth the investment?”

The answer is “Yes!” The bottom line is that strategies and preparation enable companies to influence government requirements, ensure that government expectations are realistic and guide requirements in ways that your company can meet. Thornton says the upfront time and money investment is not about winning a single contract but about building relationships that can build your business ... your bottom line.