Improve your RFPs with this one simple step
It's that time of year for those of us who consult to the public sector. Government funding has trickled down and local governments are starting to put out their requests for proposals for consulting services. And many of them will end up wasting money because they make a common mistake: they won't reveal their budget.
I'm not sure why budgets are supposed to be secret. Government grants are public record and I have occasionally been able to track back to the legislation at their local board or council and find out the approved amount for the project. But there is a misconception that keeping the budget secret will somehow get you a better deal. After all, if a consultant knows how much you have to spend, they're going to bid that amount, right?
Of course we will.
But here's the thing. As a consultant, I try to work within your budget. If you only have a small amount to spend, I try to figure out how to achieve your project goals as simply as possible. The more you have to spend, the more value I can provide.
Let's take a common example: updating emergency plans. A small budget means that I might review your plan, make recommendations, and teach you a process to correct them. A larger budget means I can help you facilitate inter agency working groups and manage your review process. If you're really flush, I can help you design an exercise to test your new plan. Without knowing your budget, I run the risk of giving you a proposal that is either undervalued for the available budget or priced outside it. Neither of us will be happy.
A big advantage to revealing your budget is that you eliminate price as a variable and can focus on value. If all competitors are fairly close in price, you can more easily compare proposals to see which offers the best value. You no longer need to juggle price versus value or use complex formulas.
So should you reveal your budget? only if you truly want the best value for your budget dollars and a wider range of quality proposals.