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The Most Common Pitfalls for Municipal ERP RFPs and How to Avoid them

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Navigating the landscape of Municipal Enterprise Resource Planning (ERP) Requests for Proposal (RFPs) can be a daunting task for local governments. As organizations seek to modernize their systems and processes, the RFP process serves as a critical juncture. However, pitfalls abound, threatening to derail the procurement journey before it even begins. Drawing from research and firsthand observations, this article illuminates common stumbling blocks encountered in the RFI or RFP process.

From unrealistic timelines to vague objectives, overly complex requirements, and inadequate consideration of technology needs, each pitfall presents its own set of challenges. By understanding and addressing these pitfalls head-on, municipalities can navigate the RFP process with clarity and confidence, ensuring the selection of an ERP solution that meets their needs and propels them towards success.

Unrealistic RFP response due dates and timelines
Setting an RFP due date from the time of issue that is too long or too short can lead to either limited vendor responses (due date timeline is too short) or unqualified vendor responses (due date timeline is too long).  Based on our experience responding to hundreds of municipal RFPs, a good target timeline from date of RFP issue to due date is about six weeks.
 
Also, setting unrealistic deadlines or rushing the procurement process after the due date can lead to poor outcomes, limited vendor responses, and unanticipated delays.  In particular, the timeline should set forth a reasonable contract negotiation and council approval length.  An ERP purchase and the resulting contract details can be complex and often take six to eight weeks (or longer) to hammer out.
 
RFP has unclear objectives and requirements:
Failure to clearly define project objectives, scope, and requirements can lead to misunderstandings and incomplete solutions.  This most often occurs when the RFP lists the functional solution set required (often listed as a series of modules or functional areas. 
 
Problems include:

a) Critical items missing from the list

b) Items included on the list that are not required

c) No distinction (or lack of clarity) between mandatory and optional items

 
RFP is too complex and/or has overly prescriptive and precise requirements
RFPs that are too complex (this can include things like exceptionally long functional checklists and many essay style questions and answer sections) will limit vendor responses and raise costs.  That is, vendors will weigh the time and effort required to respond against the probability of success and choose to either not respond or raise prices to deal with the perceived complexity of the requirements.
 

Also, being overly precise and prescriptive in the RFP requirements may limit innovation and ability for process change, raising overall costs and discouraging vendors from proposing creative solutions including use of innovative technologies.

RFP contains performance bonds or holdbacks
Unusual clauses such as performance bond requirements or holdbacks are not well suited for municipal RFPs and contracts and will limit vendor participation and response leading to possible unsatisfactory outcomes.  Instead, focus on mutually agreeable payment terms and progress payments as part of the contract negotiation process with the selected vendor.
 
RFP requires a Fixed Bid/Price
While it is reasonable to expect a fixed price for the licensing/subscription portion of the bid, fixed pricing on the consulting services portion of the bid will inflate the overall cost of the solution by as much as 40% as vendors will look to self-insure by adding contingency costs to their proposals.
 

Instead, focus on a time and materials for consulting services and build cost assurance and shared responsibility into the project by mutually agreeing to a sufficiently detailed scope of work as part of contract negotiation with the chosen vendor.

RFP functional checklists and Questions are not properly vetted
It is quite common, and a perfectly reasonable approach, to borrow functional checklists from other ERP RFPs and/or from neighboring municipalities.  The problem occurs when those checklists are not then vetted leading suboptimal vendor responses and procurement experience.  These problems include:
 

a) Use of incorrect terms and phrases or requirements that do not align with your provincial, state, or federal legislation                                                                                                                                                                                                                    b) Too many functional questions overall, many of which may not even be relevant to your needs                                  c) Unequal weighting of requirements to certain portions of your solution set.  For example, we commonly see, in a single RFP, Human Resource sections containing 200+ functional questions while the property tax section contains only 10-15 questions in the same RFP.  Given that property tax solutions are very specialized, have strict legislative requirements, and yet critical to municipal operations, a more balanced set of requirements should be targeted.

RFP does not adequately consider your current or desired technology usage
If you use Microsoft Office, for example, your RFP should clearly state expectations around how the ERP solution should interact with Office.  If you want the ERP solution to be cloud based, you should state this clearly in the RFP and add any further expectations around system access, performance, privacy, and redundancy.
 
Avoid RFP evaluation pitfalls such as:
 

  • Lack of Stakeholder Involvement.  Not involving relevant stakeholders early in the process can lead to misalignment of goals, requirements, and expectations.

  • Inadequate Communication. Poor communication with potential vendors, including unclear instructions or inconsistent responses to inquiries, can hinder the quality of proposals received.

  • Inadequate Evaluation Criteria. Lack of clear and objective evaluation criteria may result in subjective decision-making and difficulty in comparing proposals effectively.  Some specific examples of things to include are:

    • Municipal focus.  RFPs can often bring many vendors to the table including those with no tangible municipal experience.  Ensure this is included in your evaluation criteria.

    • Vendors’ past performance or references.  Avoid those with a history of poor execution or delivery.

    • Vendor stability and product roadmap.  Avoid those that cannot demonstrate future corporate stability and a long term product roadmap.

 
Steering through the complexities of Municipal ERP RFPs demands vigilance and foresight. By sidestepping common pitfalls like unrealistic timelines, vague objectives, and overly complex requirements, local governments can ensure a smoother procurement journey. Moreover, clear communication, stakeholder involvement, and robust evaluation criteria are essential for making informed decisions. Armed with these insights, municipalities can forge partnerships with vendors poised to deliver tailored solutions that meet their evolving needs. In navigating the RFP process with diligence and clarity, municipalities pave the way for a future of streamlined operations, enhanced efficiency, and sustainable growth.

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