Why Using RFP's Are So Important To Successful Negotiations

Having negotiated hundreds of contracts over the last three decades, I find it extremely disconcerting when I observe an organization negotiate anything without using a Request for Proposal (RFP) prototype. While RFP's are helpful in all negotiations, any negotiations for conferences and/or conventions with hotels that do not utilize RFP's invariably eventually having troubling outcomes.

Request for Proposals are important for many reasons. However, it is important that one first understand what an RFP actually is. An RFP is a specific type of inquiry that specifies in detail what the submitting organization's needs are, and specifically asks the responder how they might address this concern. For the sake of understanding during this article, we will base this negotiation on a hotel negotiation. A properly formed RFP is a thoroughly researched and thought out document, where the organization determines its needs in as much detail as possible. When this is used, there is far less confusion "down the road." Some of the reasons RFP's are so important include:

(1) Organizations should use the RFP as a way of creating a competition between various alternative properties and/ or locales. It is important that the cover letter for the RFP let each responder know when an answer is needed by, and that the request is being submitted to multiple facilities.

(2) What types of items might end up being issues? For example, does the hotel chaOrgarge for parking? Would the hotel make some sort of accomodation regarding this?

(3) Is there a charge for internet use? What concession might be made?

(4) In terms of audio-visual needs, which often become extremely important, what might the property be willing to do in terms of accommodations and concessions? What might be included for free? What kind of minimum guaranteed discount might be offered?

(5)Organizations who will be using guest rooms at a hotel should request complimentary meeting space.

(6) What kind of concessions might be offered in terms of Food and Beverage pricing? This is both one of the biggest profit centers for the hotel, as one of the largest expenses for the organization and its conference.

(7) What is the hotel's policy regarding special meals or dietary requirements? What is the cost for this, if any?

(8) What decorations, etc., might the hotel offer on a complimentary basis to the organization?

(9) What upgrades, frees, givebacks might the hotel offer regarding guest rooms? What is the best room rates offered, and for which categories of rooms?

(10) What is the best the hotel will do regarding flexibility regarding attrition rate?

These ten items are certainly nowhere near the full needs of an RFP. I have simply used these items to demonstrate the types of things that should be included in an RFP. The answers to an RFP should then because part of the addendum to the hotel contract.

Use of Request for Proposal procedures are best handled by expert negotiators. Your organization should select an excellent negotiator, and permit that individual to guide the entire process. The negotiator should have major input from the beginning, so as not to hamper his ability to best negotiate in the organization's behalf.