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.