Fine-tuning the RFP

Article Tools

• Bookmark

Advertisement

Most Popular News

• Where teleworking is headed in 2012
• Increased use of purchasing cards in government likely in 2012
• Affordable kiosks ensure ADA compliance in government facilities

Know before you buy or sell. Get your truck's value instantly online.

Find Your Truck Now

*To see the actual values, you must purchase a subscription or a single-vehicle lookup.

When the state published its initial RFP, it was disappointed to get only one response. It asked suppliers why they chose not to bid. The biggest stumbling block came in the cost section where suppliers were asked to submit fixed pricing for unscheduled maintenance tasks that fell under a certain dollar threshold. This requirement led to too much risk for most suppliers because they had no way of approximating how often the equipment within this parameter would need to be serviced. In rewriting the RFP, the requirement was changed, and vendors were asked to submit pricing on an hourly, time and materials basis.

One liability that Georgia and likely all states face in developing its solicitations is data — or lack thereof. The RFP called for suppliers to develop a Computerized Maintenance Management System (CMMS), a data hub for all things related to facility maintenance. The supplier would be responsible for bar-coding all of the equipment in the participating facilities and scanning it into the CMMS system within the first 60 days of the contract. All preventive maintenance work would be scheduled through and documented in the CMMS system. When equipment broke down and unplanned repairs were required, they would be ordered through the system. Maintenance histories going forward on all equipment would also be tracked through the system. As important, by funneling all data through the CMMS, the state would be able to develop some models on future maintenance needs, allowing the prediction of costs to maintain equipment at the enterprise or facility level. In addition, when DOAS runs future equipment procurements, it will be able to use a piece of equipment's maintenance costs as a factor in its total cost of ownership models in order to evaluate costs to the organization more fully. For the first time in the state's history, it will have access to a slew of reports, allowing it to make sound, data-based management decisions.

The cost section of the RFP was a blend of fixed-price and time and materials rates. For each facility in scope, suppliers were asked to provide a monthly fee to perform preventive maintenance on all equipment in the facility. That number was multiplied by 12 to arrive at the annual cost of preventive maintenance. For each facility, the state listed the number of contract staff that it expected to be on-site in the facility full-time. The suppliers were asked to quote a fully loaded price for each staff member. The state then added the facility's annual preventive maintenance cost to its total on-site staff complement to arrive at an extended price for the facility (see Table 1).

Next, the state attempted to evaluate the total cost of unplanned, unscheduled maintenance of equipment when it unexpectedly needs repair. It developed a list of seven categories of personnel (e.g., electrical technician) and approximated the number of hours that each would be required to work on unscheduled maintenance projects in a year. Suppliers were then asked to submit a fully loaded hourly rate for each category. Multiplying the annual number of hours by the hourly rate yielded the total projected cost for that category in a given year (see Table 2).

Finally, the state added up the total annual costs of each facility and the total costs of the unscheduled maintenance staff to arrive at a total annual cost of facility maintenance for each supplier. It then repeated the same exercise for the second and third years of the contract to yield a total contract value. Rates for each of the four renewal years were not quoted in the suppliers' submissions, but the RFP created a process for rate escalation or de-escalation based on Department of Labor indices.

When the central purchasing department looks to consolidate service contracts across multiple agencies, end-users often express concern that service will suffer. Smaller agencies fear that large agencies will move to the front of the line and be serviced faster, pushing them back in the queue. Others worry that aggregated volume to drive more-aggressive pricing will force the supplier to cut corners, affecting the quality of the service and response times. To mitigate the risk of service failures and help build a level of confidence among the agencies, DOAS built service-level agreements (SLAs) into the contract. Suppliers were required to provide an initial response to an unscheduled maintenance request within one day and to complete the repair within seven days. For requests that are categorized as emergency requests, the response-time SLAs were even more aggressive, with a requirement that the initial response be provided within three or four hours, depending on whether the emergency occurred during normal business hours or after-hours. Failure by the supplier to meet these SLAs would result in corrective action, up to and including termination of the contract.