You have performed a security requirement analysis and determined that part of the solution to the vulnerabilities you have identified will be the implementation of new or upgraded security systems. Although there are a number of system design and documentation tasks to be performed before procuring the hardware and software installation, consideration of the procurement methodology should be an early action item to help guide the form, format and content of the design and construction documents.
This article examines some of the issues at stake and will help make the procurement task more efficient and productive.
To bid or not to bid
Do you want, or need, to competitively bid the installation of the system? This question may be decided for you by your organization’s purchasing policies. Many organizations — particularly public agencies and large private companies — require a formal competitive bidding process. Some organizations have a dollar value threshold, below which sole-source procurement may be permitted, but the figure varies considerably.
There are many benefits to competitive procurement even if it is not required:
• It forces you to consider the needs of the project in sufficient depth to develop a clear, concise and comprehensive set of design documents;
• It provides the opportunity to discuss the design with additional systems experts, some of whom may have cost-effective solutions you may have not considered;
• Even if you plan to award the project to a trusted contractor, it helps to obtain alternate prices to confirm value and to assist in negotiation; and
• You get the best value for your budget.
IFB or RFP?
The two major forms of procurement are Invitation for Bid (IFB) and Request for Proposal (RFP), although there are many hybrid alternatives in between. We tend to use the terms “bid” and “propose” synonymously, but there is a big difference between them.
An IFB may be sent to pre-qualified contractors or may be publicly advertised by public agencies. It typically requires that bidders return a completed, pre-printed form that may have no more detail than the bidder’s name, address, project number and bid price. The contract resulting from an IFB is usually awarded to the lowest bidder, although the bidder’s qualifications may, and should, be scrutinized carefully.
Because there is little or no technical input from the bidder, the system documentation — plans, specifications, equipment schedules, etc. — must be very detailed and accurate, since the contractor is not sharing in any design responsibility and is relying on the bid documents to price his or her bid.
An RFP, on the other hand, is looking for a proposal from the candidate contractors. The proposal is the contractor’s interpretation of the project requirements and may include his or her design input for performance, efficiency and cost effectiveness. The resulting contract is now a joint effort with some of the design responsibility shifting from the owner to the contractor.
An RFP requires a more detailed response from the proposers which, depending on the project, may be up to several hundred pages. It is useful to specify the required proposal format in the contract documents, so the task of comparing apples-to-apples is simplified. Typical RFP responses should include: Contractor qualifications (financial, years in business, experience on similar projects and systems, project staff resumes, etc.); the contractor’s understanding of the project and its scope; any assumptions, exceptions or clarifications; catalog sheets describing specific equipment being proposed; and detailed pricing with materials and labor breakdowns.
Analyzing the responses to an RFP will require considerably more effort than for an IFB, but such effort pays dividends by ensuring that you select, with the highest degree of confidence possible, the contractor with the best solution for the project. On the other hand, the construction and contract documents issued for an IFB must be “rock solid” — i.e., very detailed and very accurate — if the outcome of the project is to meet your original intent.