This spring I've heard a lot of grumbling from my consultant friends about writing proposals for government transportation project RFPs (jargon – Request for Proposals). Especially when agencies seem to just pick the low bid anyways. This is actually a good sign – we're all getting busy with paying work plus agencies are putting out more projects.
But writing a proposal is still a pain in the ass (and why I write very few, I write scope/fee letters). The thing is, we went to engineering school because we want to be engineers and do engineering work. We didn't go to school hoping we would some day be sitting at a computer typing out proposals.
Something I didn't add up when I worked at the City of Maple Grove – proposals are expensive to put together. For a $50,000 project, the consulting firm will expend +/- 40 hours of effort. And this isn't effort by a cheap, newly minted engineer. This is effort from upper management. To make the math simple, let's assume a $125/hour billable rate for that staff (on the low end). So $5,000 per proposal.
If the agency gets three proposals, that's $15,000 in effort expended. Often, agencies get more then ten proposals – more effort than the project is worth – what a waste!
On top of this, a proposal (and even follow-up interview) are a very poor proxy for deciding if the winning consultant will (1) do good work and (2) work well with agency staff. On top of all of this, the folks doing the bulk of the work on the project rarely write the proposal or show up at the interview.
So what should we do…. Have design competitions! 99Designs has popularized this concept for graphic artists (I just used it for a logo – awesome experience) and architects have had these types of competitions for centuries.
Here's how it would work on transportation projects -
- The agency would provide a rough problem statement (this is a corridor study of County Road xx and we are reconstructing it in four years – what should we build?).
- The agency provides existing data (turning movement counts, maps and crash data) – things that should be simple and cheap for the agency to pull together.
- Ask the consultant to identify problems, possible solutions, criteria for making a recommendation, a preliminary recommendation with justification, what detailed analyses should be done in the next step of the project, etc.
- Whatever document the consultant submits should be anonymous. An admin person should take in the submitals and give a unique number to each package, keeping track of which consultant matches which id number. The panel selecting the consultant picks the winner based on the anonymous work so no prejudices enter the decision making process.
- The agency could choose whether or not to pay a small stipend for this work. My hunch is that paying 10 firms $2,000 each would result in a great cumulative scoping document that would allow the winning consultant to then do the next step of the project for $25,000. So instead of paying $25,000 for step one and $25,000 for step 2 to a single consultant, you harness the creative power of many consultants to do step 1 and hopefully make step 2 better AND cheaper. This would also slightly change the economics for the firms.
- The agency picks a winning firm based on their work and then they negotiate a scope/fee to wrap up the project. Can always go to firm #2 if firm #1 is unreasonable, but my hunch is that this would rarely happen.
There are many benefits to this type of approach –
- The engineers get to do the thing they are passionate about – analysis and design.
- The engineers get to learn from each other by seeing each others work. A great model for training younger engineers.
- The engineers stop doing the drudgery of putting together proposals.
- The agency gets to pick the firm based on the work they do, not the promise of the work they will do.
- The agency gets a more comprehensive and creative problem solving approach to the project.
- Greatly reduce the time the agency puts into writing the RFP – let the firms define the problem.
- Reduce costs – it's cheaper for the agency to provide the initial data then to pay the marked up pricing of the consultant firm (the consultants may identify initial data needs, but provide a starting point).
I'm calling for the end of the traditional 50 to 100 page proposal our industry expects. Agencies should go the competition route when they need creative problem solving. When a project involves straightforward, well defined work – go with a a couple of page scope/fee letter proposal.
p.s. This post was inspired by the book Decisive by Dan and Chip Heath. I highly recommend all of the books by the Heath brothers.
Good work with your blog – I read most of your blogs, and am a traffic engineer myself. I’m based in Sydney in Australia.
I can understand your point of view and this makes an excellent approach from the agency perspective. The agency will achieve best results at the most optimum costs.
From a “business” point of view, your proposed method of winning work could see consultants potentially working (technically) without engagement. Essentially it introduces more risks to the business now that consultants are providing technical analysis (however preliminary) as compared to previously preparing for fee proposals which entail summary of methodology and attachments of capability sheets (often standard docs which rarely occupy 40 hrs of a principal engineer’s input). Potentially, what was an initial investment of $5000 (RFP prep) will now be higher due to closer scrutiny and more technically challenging(thus involving more expensive engineers’ time) preliminary works.
Depending on the magnitude of the “stipend” (potentially self defeating if none)- there may be a reluctance of consultants participation however this is dependent on local availability of projects. On the contrary, will less able consultants take advantage on the “stipend” – i.e. providing preliminary works on a full time basis! That would create a whole new market for us traffic engineers!
Keep up the good work with your blog –
I’m merely sharing my views and have full appreciation of your input.
I understand how this could be a better deal for the agency than the consultant. No doubt the system would take a lot of refinement to balance out the benefits to the consultants and agencies.
The largest benefit for the consultants is that you’re spending time on engineering versus describing your engineering.
There are usually one or two entrenched firms per region. This system would be very bad for them because it would open the door for the firms who fight for the scraps. Under this system though, I would expect the quality of work to improve.
Thank you for commenting (and reading)!
You present an interesting idea that’s worth more discussion. I’m a traffic engineering consultant but have spent almost half of my career in the public sector. One area that is very important to our firm in getting selected for projects is having a good working relationship with the client. Often we get hired because public agencies like to work with us. They know we will be responsive to their needs, prepare quality work, conduct our business in an honest manner, and not nickel and dime them for unnecessary work.
Most of our work is from repeat clients even though we often have to submit a proposal. The qualifications portion of the proposal is a key element for the reasons mentioned above. I could see your design competition model working if an agency had a short list of “pre-qualified” consultants whom they then would ask to submit on a design competition. That might be the best of both worlds, as long as the consultants don’t have to get pre-qualified for every design competition.
This is a great discussion point! Where I live, Oregon, they generally have page limits around 10 to 20 pages, so there has been improvement on that end. However, I do agree that there is still too much “wasted” money that goes into proposals. But isn’t “describing your engineering” important too?
Most of us can punch the numbers in or follow standards. But how many engineers can do this and really explain what they have come up with and why it is the best idea. I think the proposals do show you not only who can communicate the ideas, results, and designs best, but it also shows who can think outside the box and come up with some truly unique ideas that are often needed. This is what an agency gets from proposals.
While I do think proposals are great for showing this, I do agree there needs to be improvement in the process.
The proposals have some value, but my experience (at least with medium to large sized firms) is that a professional marketing team is involved with putting the proposal together. This includes a lot of work on the communication elements you’re describing. Unfortunately, those marketing folks usually don’t work on the project once its won. I’m clearly thinking of a firm I know of who puts out great looking proposals, yet their reports look like they were put together in 1996.
So I think we mostly agree – our industry needs a lot of work in this area and proposals can provide some value. Extending the thinking in my post – I think the best gauge of a consultants work product is the work product. A proposal is a proxy for the work that we hope translates.
Kind of like the job candidate who is great at interviewing – the interview is hoped to be a good proxy, but the interview tells you if she’s good at interviewing, not necessarily if she’ll be a good worker.