Buying Something New: Putting Together Your Request for Proposal

"Boy, could we use another piece of equipment in our practice!” As a practice manager, you have probably thought this many times. Whether it is a simple postage machine, a new copier, or clinical equipment, the process for purchasing new equipment can be daunting. Whether the decision-making is simple reasoning in your own mind or a formal process, every decision requires the same thought process:

• Do we need this piece of equipment?

• What will it cost?

• Can we afford it?

• Should we lease it or buy it?

• What vendor should we choose?

These questions must be asked before purchasing any item. Whether your practice is small or large, budget and purchasing go hand in hand. It is important to get prices from several vendors before deciding.

In some practices, the decision to purchase a new product or service is made by the physician. In larger practices, such decisions often are made by a committee or group of physicians. This makes the request for proposal (RFP) process even more important.

Many practices are required to submit an RFP. An RFP describes your reasoning for purchasing the item and allows for more competitive pricing. With so many practices upgrading their technology, preparing an RFP is a useful way to look at different software companies. Determining the type of practice management system affects the cost and the products you will be reviewing and purchasing. Perhaps you are looking at a new linen company or some other new service. It is important to know what service you are looking at and whether the company will have the ability to achieve the level of service you need. Choosing the right product or service is important in filling the needs of your practice.

Think Before You Start

It is easy to realize the practice needs more exam gowns or tissues and just go ahead and order them. Purchasing larger items, however, requires more thought. First, determine whether you need the item. Is the reason for purchasing the item that you want it or need it? Determine its worth in improving patient care, saving time, and being cost effective.

Your timeline is an important factor to consider. How soon do you need the item? Will it be delivered, or do you need to pick it up? If it is a service you are purchasing, what days will the service come to your location? For example, a medical record copy service may come to your location once or twice a week. Part of the decision-making process for you would be to determine how often you need the service.

Specifications

What are the specifications of the item you are purchasing? Think about what you are trying to accomplish with the item. For example, if you are considering a new copier, how many copies do you want to be able to make per minute? Should your copier have the ability to scan? Will the copier be used to fax? If so, you may be looking at a larger item as opposed to a simple copier.

Determining your criteria ahead of time will save you time and aggravation later.

Consider the space where you plan to put the new piece of equipment. If your space is small, you cannot buy a large copier. A desktop printer for your transcription staff is different from the primary copier where you plan to fax and scan. Location and size are important.

Determining your criteria ahead of time will save you time and aggravation later. The item you ultimately choose should meet your needs and criteria.

When Do You Want It?

If you want the item by a specific date, that information should be in your RFP and then again in the contract. Be specific on delivery, charges, expectations, and consequences of not having the product delivered as determined. At the same time, it is important to be reasonable on your timeline.

The Bidding Process

Who can bid on your RFP? Assuming you are replacing your copier, determine whether you want all companies to bid, or just selected ones. Define how you are choosing the companies to bid. A small company with just a few copiers may not be the correct one to bid. Your practice most likely needs a larger company that has an assortment of copiers with specific features. You may be looking for a company that also will service your new copier.

It is important to know what you are looking for and how you will best achieve that result. Planning will help you to achieve your goal.

In another example, if you are looking for a new laundry service for your practice, determine what features the service must be able to provide to be eligible to bid on the RFP. You will most likely choose a company that has pickup and delivery services. You will want to look at how often the service delivers to your practice. Cost also will be a factor.

The Decision Process

How will the decision be made? Will the process be quick? Or will it take months to choose the best product for your practice? Your RFP should clarify the process by which you will choose the final product.

The RFP also should specify who will be making the decision. In a smaller practice, it may be a single physician or the practice manager, whereas in a larger practice, it may be one or more physicians or several physicians. It may even be a committee that makes the final selection.

What to Include

The actual writing of the RFP takes time. You have spent the hours preparing by looking at what you need or want, how you want to purchase it, and what process you will utilize to achieve your goal. The beginning of your RFP should provide the basic information. Your RFP needs a title or topic. Include the date that you are writing or submitting the document. Include the item you intend to purchase or the service you wish to acquire.

The next portion of your RFP should include the basic points. It is your opportunity to specify the need for or value of the product or service. Specify the value to the practice. Clarify what the practice will gain by this new purchase.

If there is a specific timeframe to purchase the product, it should be documented in the RFP. Clarify the difference between need and want. Using verbiage such as “will” and “must” shows need, whereas words such as “may” or “might” show want. When a practice wants to prove need, demonstrate that need through the verbiage used. It is important to be factual regarding the purpose of the purchase.

Next is the time that you are looking at. Be specific not only regarding when you require delivery of the product, but also the length of time you are planning on using the product or keeping the service. Specify the length of time the lease or service will be in effect. Is the agreement for one year, five years, or more?

Recap the important points to ensure that everyone is clear on your expectation.

If you have an idea—approximate or exact—of the cost, then the amount should be listed in the RFP. The more information included, the better the chance of approval.

Last, a summary or conclusion should be included in the RFP. Recap the important points to ensure that everyone is clear on your expectation.

Submitting the RFP

When submitted, the RFP should include the timeline and when the response is due. Setting expectations lets the company, whether a product or service, know when to respond. It is easier to meet an expectation when you know what that expectation is.

If you are in a situation that needs prompt attention, then request a shorter time to respond. Include where to send the response and if you want the response sent a certain way.

Request for Information and Request for Quotation

Once you have the approval from your practice to move forward, you send the RFP to the vendors you have selected along with a request for information or a request for a price quotation. These documents notify the vendors that you are looking for a specific item and you are inviting them to give proposals for that item or service.

Your request for information about the company’s product or service or your request for a quotation should be specific as to what you are looking for and should include any special needs you have for that product or service.

When a practice is looking for a new item or service, it may not know which companies to target. The best referral is word of mouth. Therefore, it is a good idea to contact your peers to see what vendors they are using and whether they are satisfied. For example, answering services can be very efficient or not efficient at all in reaching the physician on call. It is reasonable to see what others think of the service prior to entering into a contract with one.

Also, state that you want a final offer up front. The response to your RFP should not turn into a negotiation. Let those bidding on the RFP give you their best offer. Your practice is too busy to get caught in a bidding war.

That said, if there is a specific company you want to do business with, it is feasible to ask whether the proposal it submits to you is negotiable. Whether it is the product, service, timeline, or price, if there is something that doesn’t meet your needs find out if that can be changed.

That is where follow-up comes into play. As a practice, you should monitor who is offering bids, whether the bids are timely, and whether they accomplish what you need. For example, if the laundry service only comes once a week and you need the service twice a week, is that negotiable in the proposal and contract? How much more would the cost be if there is an increase in the frequency of delivery?

Conclusion

Submitting a routine RFP does not need to be complicated—it just needs to be specific. Any proposal for a product or service usually is submitted first to the physician or decision makers, who then can determine the need for the request and whether to move forward with bids.

It is important to review all the bids and contracts carefully, because there may be something in the fine print that will not be in line with your needs. Know what the company is offering and be clear that it meets your expectations and needs. In some cases, a practice may want to have an attorney read the contract prior to signing.

Remember, when a company offers you something that appears to be too good to be true, it probably is. Determine your need and know what you expect the service and cost to be. There is a reason you have submitted a “request for proposal.” Verify you are meeting that need.

Suggested Readings

Reh FJ. How to write an RFP. The Balance. Updated March 17, 2017. www.thebalance.com/how-to-write-an-rfp-2276025 .

Request for proposal. Wikipedia.org. https://en.wikipedia.org/wiki/request_for_proposal .