Why we need to rethink RFPs in construction

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Nancy Novak is Chief Innovation Officer at Dallas-based Compass Datacenters. Opinions are the writer’s personal.

Anybody who’s been in building for any period of time is aware of nothing occurs in our enterprise with out an RFP.

They’re indispensable in our business for bringing collectively house owners and contractors to perform large issues. However there’s an issue. Far too usually, the RFP course of is dysfunctional in methods which are a lose-lose scenario for each house owners and basic contractors.

Throughout my profession in building I’ve labored on each the contractor and proprietor sides of the enterprise, permitting me to expertise the RFP course of from each factors of view.

Belief is so important when organizations come collectively to work on bold building tasks. And RFPs are the primary alternative for house owners and GCs to start constructing the type of belief that drives higher outcomes.

Nancy Novak

Courtesy of Compass Datacenters

I’ve made {that a} focus of the way in which Compass Datacenters conducts RFPs, and the consequence has been a stage of partnership with our GCs that has been an enormous engine for innovation, for driving effectivity and value discount, for accelerating supply timelines and for driving developments in high quality, sustainability and employee security.

Adversaries vs. companions

RFPs needs to be the beginning of a partnership. However so usually, the result’s the precise reverse.

RFPs are usually written, issued and carried out with a mindset that the 2 sides of our business are concerned in a zero-sum sport. It’s plain to see within the language of RFPs and the conferences that observe: the belief is that this course of will find yourself with a winner and a loser by way of funds, threat and extra. This instantly places either side in a defensive place the place the individuals throughout the desk aren’t a possible accomplice, however an adversary.

I perceive how we obtained right here. Everybody in our business has trauma from offers which have gone mistaken, leaving one aspect or the opposite shedding cash or being saddled with the implications of imbalanced threat. Given these disagreeable experiences, I consider our business has let considerations about contractual language — one thing that needs to be left for a lot later within the mission lifecycle — hijack the RFP course of.

Doing so turns proposal processes right into a preliminary battlefield over threat considerations that solely do injury within the early phases of talks between house owners and GCs. It’s like being on a primary date and beginning an argument about who would hypothetically get custody of the canine if there’s ever a divorce. That’s no solution to begin a relationship, in courting or in building.

This dysfunctional, trauma-driven method to RFPs causes hurt to each house owners and GCs in unacceptably larger prices, frustratingly inefficient processes for reaching agreements and distorted relationships that inhibit collaboration and innovation. It additionally negatively impacts a very powerful targets on this enterprise: delivering on time, constructing with high quality and doing all of that profitably.

A name for change

That is why we desperately want a brand new method to RFPs in our business. We must always cease utilizing RFPs to combat early battles over the phrases that might be within the Proper to Treatments and Administrative sections of the contract. Focusing RFP processes so closely on threat administration is just not conducive to establishing a partnership that can efficiently deliver a mission from idea to actuality.

As an alternative of focusing the RFP course of on authorized maneuvering, the emphasis needs to be an open dialogue scope that stays as a lot within the realm of layman’s phrases as attainable reasonably than drifting into legalese that makes GCs really feel much less like a possible accomplice and extra like somebody who isn’t trusted.

At a time when house owners want contractors greater than ever due to the workforce disaster and the variety of tasks which are in holding patterns due to a scarcity of GCs to construct them, making contractors really feel like they’re the adversary is solely dangerous enterprise.

As an alternative, house owners want GCs to turn out to be their companions, and it ought to begin with the RFP course of. The RFP ought to give GCs an opportunity to point out off their strengths and greatest concepts for the deliberate mission. To offer them that chance, house owners have to cease writing RFPs to deal with the construction of the enterprise relationship and to focus extra on the means and strategies of carrying out the shared goal.

RFPs ship probably the most worth to house owners when these proposals and conferences embody open discussions about how contractors can apply their expertise and creativity to unravel advanced issues.

In truth, to make sure that this collaborative dialogue doesn’t fall into the entice of being an early contractual battlefield, I like to recommend that the method begin earlier than the RFP is crafted by partaking in pre-RFP dialogues. This seeks out GC enter on how the mission goals needs to be envisioned and the way greatest to design the RFP to fulfill these goals. It’s also how companions work with each other: with open communication that builds understanding and belief, in service of reaching a typical objective.

That is notably useful for producing revolutionary concepts for website adaptation which are more likely to drive decrease prices, sooner timelines and higher outcomes. The proprietor might have a imaginative and prescient for the mission, however you want the contractor’s perspective to form the technique for adapting the plan for a given website. Their solutions might be important to defining the scope of labor in the precise approach. When RFPs are structured in a approach that stymies open dialogue and collaborative problem-solving, that type of communication not often occurs.

When given the possibility to behave as true companions, repeatedly I’ve seen contractors step up, embrace the chance and convey super concepts to the desk that make tasks higher each time.

As house owners, we’ve the power to drive optimistic change with the way in which RFPs are carried out in our business. It’s time to grab that chance, and I consider there are monumental aggressive benefits for house owners that do.

Market circumstances make it more durable than ever for house owners to seek out building companions to tackle pressing tasks. GCs are in super demand and have their alternative of tasks to work on, they usually need companions who need to share threat pretty, who give contractors a voice within the course of and whose method to RFPs lays a basis for collaboration. House owners that show that they honestly have a partnership mindset are those who’re going to achieve success.

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