How do you know what you don’t know? How do you get vendors to tell you about potential problems with the project they are proposing?
One way is to introduce a paragraph into your RFP demanding risk management information. This simple act will markedly improve the quality of information you receive and your ability to evaluate the vendors and their proposals.
The management of risk is a standard business practice. Risk analysis is the process of assessing, managing and communicating risks. Because of the ubiquitous nature of risk, risk analysis is inherently an interdisciplinary subject with many content-specific applications in engineering, finance, health, transportation and military systems.
In recent years, risk analysis has emerged from the back room of insurance companies and disaster planners. It is now a popular and accepted business tool. The military has always included risk analyses in its RFPs. However, few non-military RFPs mention risk and even fewer have risk management as an evaluation factor.
Many government entities such as cities or counties have risk managers who concern themselves with activities such as subdivision development, provision of sewer services, and traffic management. But few deal with RFPs or projects.
In the U.S., at the federal level, the use of risk as an evaluation factor is well understood. For example, the Census Bureau includes risk in its determination of best value: “The Census Bureau’s source evaluation will be based on best-value principles. Accordingly, award will be made to the responsible and technically acceptable offeror whose proposal provides the greatest overall value to the government, price and other factors considered. This best-value determination will be accomplished by comparing the value of the differences in the technical factors for competing offers, based on their strengths, weaknesses, and risks, with differences in their price to the government.”