24.2 Solution-based RFPs and performance-based contracting

24.2.0 Solution-based RFPs and performance-based contracting

Solution-based RFPs ask suppliers to propose an IT business solution to solve an agency’s identified problems and goals. Solution-based RFPs briefly state the business need, describe the technology problem, and demand minimal specifications and requirements. Suppliers are allowed to use their broad-spectrum technology market expertise, creativity and resources to propose innovative cost-effective solutions. Solution-based RFPs may request suppliers to provide a solution for only part of a business problem or to propose high-level concept-type solutions which are evaluated based on a detailed set of requirements.

Agencies should strive to minimize requirements and specifications to allow flexibility in the types of solutions being proposed. Specifications and requirements set limits and may eliminate or restrict the items or solutions available for the supplier to include in its proposal. Technology specifications should be written to encourage, not discourage, competition while also attempting to seek economy for the purpose and technology solution intended. An agency is then able to identify the technology solution, not a particular product or service, which will best meet its technology or business need.

Part of the decision-making process of when to use a solution-based RFP involves performing a risk analysis. As part of the risk analysis, the procurement project team resolves the following questions:

Does the technology business problem present an opportunity for mutually beneficial risk sharing between the agency and a supplier?

  • What factors could significantly impact the probability of completing our project on time and within budget?
  • Is it possible to evaluate the proposed solutions equally?
  • Can the solution(s) be evaluated based on a total cost of ownership analysis incorporating the anticipated cost of supporting the proposed solution and other financial options?

When preparing a solution-based RFP, some components of the RFP will be different than a non-solution-based RFP. A solution-based RFP should include:

  • The agency’s organizational background and current business environment,
  • A specific list of processes and procedures related to the project, legal or business mandates,
  • Any project procedural or process documentation,
  • A clear definition of the agency’s current technical environment including all current hardware and software being used, that could be used or should be used to address the project requirements,
  • A definition of the business or technology problem to be solved, but not a definition of the desired solution or the problem in terms of a desired solution,
  • Specifications that describe the characteristics of a technology product, service or solution being sought.

In a solutions-based RFP, agencies should use technology questions to drive specifications instead of including mandatory requirements in the RFP. The goal is to invite maximum reasonable competition, while procuring the best technology solution for the Commonwealth. Use solution-based RFPs for establishing statewide contracts and procuring technology solutions to provide best-value for the Commonwealth. Pose questions to suppliers in the RFP to drive requirements, such as: “What is the industry standard for this product and does your product(s) meet or exceed such standard?”

The goal of a competitively negotiated RFP acquisition is to invite maximum and reasonable competition among the supplier community while procuring the best-value technology solution for the Commonwealth.