RFPs: Best Practices Presented by: Patrick Pearson, Government Banking David Bass, Consultant

RFPs:Best Practices

RFPs:Best Practices

Presented by:Patrick Pearson, Government Banking

David Bass, Consultant

Enhancement Template 22

Reasons Not to Issue a RFP

• Don’t know where to start.• Don’t have the time or staff.• It’s a lot of work.• We’ve been with our bank for 20 years, and we’re

happy.• We don’t get charged any service charges


Why Go Out To Bid?

• Mandated• Services Available• Pricing Comparison• New Products Available in the Marketplace


Questions For You

• Why issue a full blown RFP?

• How about a pricing RFP?


Bank Considerations

• Is a local branch within City limits important?• To you?• To City Council?• Why?

• Do you consider a banking office the same as an office in a grocery store?

• Why or why not?• Is it important that the Bank have a separate

Government Banking Division?• Why or why not?


State/Bank Relationship

• Is it important that the Bank under consideration be able to make LAIF transfers directly?

• Why?• Is there an advantage to working with a Bank that

has a relationship with the State?• Why?


Seven Primary Steps

1) Set Objectives2) Establish Review Team3) Determine Scoring Methodology4) Write and Issue RFP5) Evaluate, Score, Award6) Implementation Process


Set Objectives• Background on entity – history, size, current services• Define current processes and procedures

– Include sample volumes– Include analysis statements

• Identify challenges and hot buttons– E.g., security, fraud, efficiency

• Clearly specify objectives– E.g., enhance or add controls to check issuance; improve investment return; consolidate accounts, reduce costs, new technology- Duration of contract


Set Objectives

Whether you are focused on improving your efficiency, saving money, preventing fraud or finding the best vendor with the best services, the process of writing and evaluating proposals starts with a picture of your current process and a clear view of your objectives.


Establish Review Team

• Outside Consultant

• Internal TeamNumber on team will vary

Select early in process

Let them participate in entire process

Agree upon scoring tools and values


Determine Scoring Methodology

• Create a Scoring Template or Matrix based upon the objectives you set

• Assign values or weights to the objectives in line with their importance to you– If primary objective is to maximize amount of funds

available for investing, assign this highest value • Determine your scoring methodology before evaluating

responses– Criteria for awarding points to non-optimal answers

• Mandatory criteria


Determine Scoring MethodologySample Scoring Sheet:

Bank A Bank B Bank C Bank DPricing Max Value

Interest Rate 20Total Fees 20

Experience of vendor 10Ability to meet current needs 15Ability to provide additional needsImplementation process 15Completeness of Proposal 20

TOTAL 100


Gather Information

• Gather latest information about bank services and processes, matching relevant services with your needs and objectives prior to issuing RFP

– Meetings with banks

– Industry functions

– Speak with peers

• Provide information about your processes, challenges, and objectives that vendors can use to create a proposal that is easier to evaluate


Write & Issue RFP• Writing the RFP

– Many elements of the RFP can be boilerplate– Customize RFP based upon your current servicing needs and objectives– Include a pricing sheet

• Pre-Bid Conference• Include RFP response guidelines

– Establish dues dates and timeline– Questions and clarification process and time frame– How do you want the response to be ordered

• State Conditions for Termination and Contract Requirements

• Paper versus electronic

Request For

Proposal

Request For

Proposal


You’ve Issued the RFP, now what?

• Have you considered . . . .– Having each Banker visit your office and

• See your operation• Analyze your operation• Work with you• You/banker ask each other questions


Services

• Lockbox• Utilities• Business License

• Bill Consolidator• Remote Deposit

• Eliminate trips to bank (employee liability)• Reduce/eliminate armored car costs


Bank Products

• Are you aware that your Bank offers:• Remote Deposit• Sweep• Controlled Disbursement• Merchant Services• “Pay” Button for your web site


Evaluate – Score - Award

• Evaluate Proposal Responses– Independent evaluations versus group versus outside

consultant– Involve peers

• Separate pricing from proposal responses– Ability to perform– Cost

• Contact references– Inquire on relevant issues– In RFP ask for lost customers



• Pricing Review– DO NOT attempt line by line price comparison

• Complex due to technology and methodology

• “Best Price” is not necessarily the lowest price.



• Post bid presentations– Provides opportunity for hands-on demonstrations and

clarification

– Allows vendors to highlight proposal

• Timeframe• Decision and Notification

– Making decision

– Announcing decision


How Pay For Services

• Soft dollars?

• Hard dollars?


Implementation Process

• Schedule meeting with new vendor soon after awarding– Discuss contract at this time– Obtain any required paperwork

• Designate key contact(s)• Hold periodic meetings during implementation

– How often?– In person or conference call?– Follow up/through– Who will deal with LAIF, County, State?

• Establish basis for on-going meetings– Quarterly, semi-annual or annual

• What are your expectations?


After ImplementationEstablishment of Relationship

• Banker Visits• How often?• Discussion of new products?• Review analysis statement?


Questions

Documents

RFPs: Best Practices Presented by: Patrick Pearson, Government Banking David Bass, Consultant