How to set up an RFP scoring system (Free Template Included)

Request for Proposal (RFP) Scoring involves reviewing vendor proposals and assigning a numerical value which indicates how closely it matches the scope of the business's requirements. The scoring process is a strategic activity that helps businesses to ensure that they only onboard vendors whom they can build a mutually-beneficial relationship with. 

A key purpose of the RFP is to obtain proposals from vendors expected to be able to satisfy most, if not all, of the needs expressed in it.

Checking if and how well a proposal does meet those needs is a critical activity that in most cases needs to be a formal and structured operation. It should form part of your RFP proposal evaluation. 

Consistency of approach across multiple evaluators, the depth of the scoring approach and a documented record of scores are important for providing confidence in the fairness and justifiability of the evaluation.

This might be crucial if the RFP outcome is challenged by any participating vendors or regulators.

RFP Scoring Sheets and Templates

A collection of modifiable templates containing instructions for use are available to assist with the activities specified in this article and others in the RFP Guide series. They are designed to facilitate an RFP for a Vendor and Contract Management Platform but most of the principles and content can be applied more widely.

Evaluation of vendor proposals is usually accomplished by use of RFP scoring scoresheets. This approach allows independent reviewers to assess every scorable item in or related to a proposal. Scores can be assigned or the need for more information or clarity from the vendor can be recorded.

The completed scoresheets will form part of the audit trail of how any recommendation of a preferred proposal is reached.

The scoresheet approach allows direct comparison of scores assigned to participating vendors at the level of:

• Individual requirements or other scorable items
• Groups of related requirements or other scorable items
• Clusters of related groups
• Totals

In an ideal scenario, these comparisons can be made for:

• Each individual evaluator
• An individual evaluator against another evaluator
• An individual evaluator against the average of the sum of all evaluators' scores.

How to establish your RFP Evaluation Scoring Method

The evaluation method can be simple or complex, depending on the criticality of the purpose of the RFP. Several elements need to be considered in devising a suitable evaluation method:

1. Define your RFP evaluation criteria

The evaluation criteria used in the scoresheet should match those specified in the original RFP document. If you’re referencing our CMS Document, these are in section six.

They need to match because vendors may have relied on those criteria to focus the pitch of their proposals. Any subsequent debrief offered to unsuccessful vendors after the RFP process normally reveals the score they achieved.

If there’s any discrepancy in the criteria then they may have grounds to raise a challenge to the RFP outcome.

2. Decide on your RFP Scoring scales

A numeric scoring scale is preferred as it allows scores from multiple reviewers to be summed and averaged.

The scale should span a linear range of numbers sufficient to cover the granularity required to express the closeness of fit between requirement and vendor capability.

For example, a range of 0 - 1 can be used where all the vendor responses can be categorised as 'No' or 'Yes', or 0 - 3 for something like 'No response', 'Low', 'Medium' and 'High'.

To allow for situations where the numeric granularity between ratings like 'Medium' (2) and 'High' (3) is too coarse to capture an in-between rating, the use of decimal fractions for finer granularity may be allowed, whereby a score of 2.5 indicates 'Medium- High'.

3. Apply RFP scoring context

The meaning of a particular numeric score may depend on the context of the requirement or item being evaluated. For this reason, every element in a scoresheet should indicate which scoring context applies.

For instance, the expected response may need to indicate a level of compliance, how well objectives are met, or the assignment of a cost / risk pairing as shown below:

4. Note the Importance of individual scorable items

While simple to use, the linear scoring scale has a shortcoming in that it treats each scorable item as having the same importance, contributing equally to the total score.

This is unlikely to ever be the case.

Some scorable items will always be more important than others, as will already be reflected in the requirements specification, so the scoring should be adjusted to numerically acknowledge the fact, as follows:

• Importance can be indicated by the application of a 'weight' to each scorable item, a multiplier that increases the assigned raw score so that it has more influence on the total score
• The default weight setting is one, producing no change to the assigned score. The maximum weight is typically set between three and five to minimise distortion of the overall score. See a worked example below:

5. Group related, scorable items together

Related scorable items are usually documented in the RFP in groups. For a VCLM platform this might include access controls, workflow and contract authoring.

For evaluation purposes, groups may be assigned to clusters, like functional requirements, non-functional requirements and pricing. Just as with individual scorable items, different groups may have different levels of importance.

A common method of assigning importance to a group of scorable items is to allocate a percentage of the maximum total weighted scores possible across all individual requirements, where the larger the percentage, the higher the importance.

The allocation to each cluster is simply the sum of allocations to each group in the cluster. For a CMS this approach allows for cluster importance ranking such as:

• Functional requirements category: 50%, made up from access controls at 10%, workflow at 25% and contract authoring at 15%
• Non-functional requirements: 20%
• Pricing: 30%

Since a group's actual percentage will rarely exactly match its assigned percentage, a simple scaling factor can be calculated to adjust the group's weighted scores up or down as necessary. The scaling factor will be calculated automatically in the scoresheet following input of the desired section percentage figures.

In the worked example below for a VCLM:

• Column 2 shows the maximum weighted score possible in each RFP section
• Column 3 shows each RFP section's actual percentage of the total maximum weighted scores possible
• Column 4 shows the desired RFP section percentages as listed above
• Column 5 shows the scaling factor that needs to be applied to the total weighted score allocated to each RFP section to achieve the desired percentages shown in column 4

6. Prepare RFP Scoresheets

Different scoresheets and accompanying issue logs should be developed for use by various members of the evaluation team to record their assessment of scorable items in vendor proposals and related information.

Guidelines for completing the scoresheets should be provided for reference, and a familiarisation session held for the evaluation team.

The scoresheets should cover the following areas:

• Functional and non-functional requirements, for scoring by stakeholders according to their backgrounds and expertise
• Pricing, for scoring by the core team* with assistance as required from members of the Finance team not otherwise involved in the RFP process, if possible
• The contract (whether the vendor's contract or comments about the organisation's contract), for scoring by the core team with assistance as required from members of the Legal team not otherwise involved in the RFP process, if possible
• Vendor viability, proposal quality and compliance with prescribed response formats, for scoring by the core team
• Product presentation, for scoring by all team members attending the sessions.

*Here we refer to a “core team”, which would be the team that is running the RFP from an internal viewpoint and has the most relevant expertise. 

How to Issue the RFP to Vendors

Issuing the RFP is simply a matter of emailing each invited vendor a copy of the RFP document, the RFP Response and Pricing templates that you prepared earlier. You can also send your organisation's standard contract covering the acquisition of software and related services if there is one.

The email should advise vendors about the RFP Activity Timetable, and include a copy of the timetable in the body of the email to reinforce its importance.

Once the RFP has been issued, the core team is likely to be involved in some or all of the following activities:

1. Deal with communications from the invited vendors

For both probity and efficiency reasons, all communications with invited vendors are to be conducted via email directed to and handled by the Designated Contact specified in the RFP.

This approach allows a central log to be maintained of all such communications, showing dates and times when received and responded to, the nature of the communications and who dealt with the subject matter, and so on.

On receipt of an email from an invited vendor, the Designated Contact should log the details, then following any necessary discussions with the core team, forward the email to a core team member or an RFP stakeholder for consideration and response.

The email responder may call on anybody participating in the RFP for assistance in dealing with the email's subject matter or escalate the matter via the core team management as necessary. The response can be a straightforward answer to a query, or it can raise questions for the vendor to gather more information.

On receipt of an email responder's response to a vendor email, the Designated Contact should update the communications log with pertinent details then create and send a reply to the relevant email.

2. Respond to RFP questions

There will inevitably be queries raised by vendors about some aspect of the RFP.

Apart from questions, clarifications may be requested, corrections suggested or reasons may be provided for why the timetable is unrealistic and should be extended.

There may be appeals for exclusion from some element or other of the RFP, and there also may be proposals for a completely different way of responding to the RFP or satisfying its requirements.

To ensure all such queries are dealt with, details should be recorded in a log, along with the relevant responses.

A written response is required for every matter raised by a vendor, no matter how trivial. The responses must be professional, as accurate as possible and timely.

Except where a query and its answer are genuinely confidential to the questioner, every question received and its response should be sent to all participating vendor without revealing the identity of the questioner.

3. Issue revisions to the RFP

Circumstances can and do arise that can only be addressed by changing the RFP in some fashion. The substance of a change can range from trivial to substantial and may result in amendments to various scoring templates. Changes may also be needed to the RFP timetable to allow participating vendors to:

• Understand the nature and implications of the changes
• Consider a response to those changes
• Decide whether or not to participate in the revised RFP
• Revise and update, or replace completely, any work on a response done to date.

Where changes to the RFP timetable are deemed necessary, before notice is given to the participating vendors, internal stakeholders need to be advised and the availability of key people may have to be renegotiated to ensure that the revised dates remain internally acceptable.

Where the RFP timetable does get changed, to minimise the opportunity for complaints or challenges, it should apply to all participating vendors even if only one requested such a change.

In extreme or unusual circumstances, it may be necessary to withdraw the RFP. An appropriate statement should be issued to the participating vendors, stating any reasons that are allowed to be revealed, thanking the vendors for their efforts to date, and apologising for the inconvenience caused.

4. Manage vendor compliance with timetables

Vendors are always busy chasing new or repeat business, particularly at end of a quarter, half-year and full year. They can be affected by events outside their control, like the weather or political instability.

Their staff can leave, get sick, take holidays, attend sales conferences and the like. For these and many other reasons, vendors can fail to meet a date specified in the RFP timetable.

The consequences to a vendor of missing a deadline depend on how the RFP specifies a response to such failures. Whether or not the vendor provided timely notice of an expected failure may also influence the consequences.

To help achieve compliance with timetables, each vendor should be formally advised about:

• The approach of any deadline, with a few days' notice. This advice may help to minimise the number of missed deadlines. It may also result in some requests for deadline extensions from vendors
• The passing of any deadline, on the next business day following the deadline.
  
  This advice should acknowledge, as appropriate, the vendor's:
1. compliance with the deadline, with thanks, or
2. failure to meet the deadline, with a request for explanation and intentions going forward. Details of the possible or actual consequences of non-reply or failure to explain should be provided, as well as a further deadline for a response.

Vendor compliance with timetables should be closely monitored to minimise any delays and requests for extensions.

Wrap-Up

To recap, an RFP scoring approach should:

• Make comparison of proposals and scorers straightforward
• Use scoring scales to give meaning to scores
• Include weightings so that scores are given the appropriate relative importance

When interacting with RFP participants, it’s important to:

• Release of the RFP and all associated documents to the invited vendors
• Handle vendor questions about the RFP in a fair manner
• Reissue the RFP if changes are required in response to vendor questions
• Ensure vendors comply with the RFP timetable.

If you are considering running an RFP for a Vendor and Contract Lifecycle Platform, and would like to hear more about Gatekeeper, then please contact us today.