The Bidding Process
- By Gail M. Zeman
- November 1st, 2009
A message comes in. Your district has decided to outsource custodial services (or food services, transportation, technology repair, physical plant preventive maintenance, etc.) and you’ve never prepared a bid or request for proposals before that is similar to this request. With 50 other tasks awaiting you, where do you start in order to efficiently produce the best possible result?
Key Point: Your bid/proposal preparation must be made with a view to purchasing the BEST SERVICE for the LOWEST EXPENDITURE OF RESOURCES. Cheap is not the same as cost effective.
Take a breath. You probably already have boilerplate bid language and contract forms for routine purchases. Also, you no doubt have colleagues in other districts who have made purchases like the one you are about to make. Consider these “already haves” as your starting place. Now, get down to the questions you need to answer before you can begin preparing for this purchase.
1. Begin With the End Users
- Do you know exactly what is needed?
- What is the estimated value of (or budget for) the purchase?
- What contract term do you want?
- Is there a purchasing group that would give you a better competitive position for your purchase?
- Are you conversant with the applicable state and local laws and regulations that govern purchasing, including dollar thresholds and permitted methods of procurement.
- What vendors are likely to be interested in providing your services and what aspects of your purchase are likely to be attractive to the best vendors?
- What criteria will you use to evaluate bids or proposals?
Find out who initiated the change and ask specific questions. Exactly what services will be required? How often? Will in-house staff play any part? If you have labor contracts or agreements, how will they be affected? Do you need to bargain? Who, from your district, will monitor the outside service? Using what guidelines? How long will the service be required?
The answers to these kinds of questions will largely determine the next steps in your bid or proposal process. The more investment the direct stakeholders have in determining what they want, the better your end result is likely to be.
A small district just completed construction of a new middle-high school. The new building is double the size of the one it replaced and will be used extensively by community groups outside of school time. The in-house custodial staff had too few workers to care for the larger area. The decision was made to outsource only the common area cleaning, leaving in place existing staff to clean classrooms, offices and provide other custodial services.
In this case, the facilities director made the decision to specify the number of labor hours that would be needed to do this work, and to bid labor-only for the job. A senior custodian will be on site as a working supervisor during the contractor’s work time to answer questions, observe services rendered and provide equipment and materials to the contractor’s workers. Pre-bid estimates were based on hours to be worked times a local average wage rate.
2. Use Your Colleagues
It’s likely that your colleagues in other districts have developed specifications that you can amend to suit your need. Additionally, they may have valuable information about the vendors in the area. Mine their knowledge, using your own judgment and circumstances to create your own bid or proposal document. It’s rarely necessary to start from scratch, and to do so risks leaving out important legal or evaluative language that you’ll need.
3. IFB or RFP?
The type of service you need will determine whether you use an Invitation for Bid (IFB) or a Request for Proposals (RFP) to obtain your new services. If experience and references, or the complex nature of the services, will determine your selection, you may want to develop an RFP. In this process, the qualifications of the proposer are evaluated BEFORE considering price. Make sure your selection criteria are very clear in this type of procurement process.
If your specifications are “tight” and will give you only qualified bidders, use a simpler IFB. Again, the bidders must have met a series of qualifications listed in your specs, but once met, the determining factor is price. You, of course, establish how price will be calculated.
Since the district referenced above was establishing how many hours of work would be required and the exact nature of the job, it was appropriate to use a bid process. The specifications stated that a qualified bidder would have experience in similar settings, would have been in the cleaning service business for a minimum of five years, would have fully executed all parts of the bid package and would have positive references from a minimum of three clients.
If those criteria were all met, then the successful bidder would be the one providing the lowest total cost bid, based on three years of service.
Before releasing your invitation and specifications, consider what will make you attractive as a client. Are the vendors staffed and equipped to do your work, are they locally or nationally focused, what qualifications and training do they provide for their employees, will they will be required to pay a regulated wage rate, and do the vendors have a history of keeping qualified employees on staff? You may want to word your specifications to include or discourage certain categories of bidders. This is a way, for example, to encourage local companies to provide services to the schools, often a good option in multiple ways.
Be clear that in schools, safety is paramount. You will need CORI (Criminal Offender Record Information) on every worker entering your building, and you must be assured that only legally eligible workers are on site. The vendors need to be aware of these requirements up front.
4. Reasonability Test
Once you have a bid or proposal package put together, do a “reasonability test” to be sure that what you’re asking of the vendors is realistically possible within the price range you’ve estimated. Of course the bids/proposals, themselves, will answer that question, but it will save you time to change language in specifications before issuing them, or offer alternate bidding options in the framework of the package, if you think you may get responses out of your reach.
When bidding for transportation services, one district requested bids be prepared using two transportation distances from the schools. Bidders were asked to determine the number of buses and runs necessary for transportation: a) 1 mile from each elementary school and 1.5 miles from each secondary school; b) 1.5 miles from each elementary and 2 miles from each secondary school. The district reserved the right to use different scenarios in different years of the bid term and, in fact, did so after the bid was awarded.
5. A Way Out
Financial and political situations change during the course of a contract term, and sometimes even during a bid process. A district must always have escape language in the invitation as well as the body of the bid/proposal. Language such as the following has proven useful to countless districts over time:
“The Local School Board reserves the right to accept or reject any or all bids or parts thereof, or to select a bidder who does not provide the lowest price, as it deems to be in the best interest of the Local Public Schools.”
In this time of increased competition in the service sector and changing budget tides, outsourcing certain non-instructional services may be of value to school districts. If so, take advantage of the options out there and learn as much as you can before committing.
Gail M. Zeman is a consulting school business administrator with more than 25 years' experience in school finance, operations, construction and business administration. She specializes in communication and mentorship in public schools and can be reached at email@example.com.