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Nancy Novak is responsible for Innovation in Compass Data Centers, based on Dallas. Opinions are typical of the author.
Anyone who has been under construction during any time knows that nothing happens in our business without RFP.
They are indispensable in our industry to gather owners and contractors to achieve great things. But there is a problem. Very often, the RFP process is dysfunctional in ways that are a situation of loss of loss for both the owners and the general contractors.
During my construction career I worked on both sides of the contractor and the owner of the business, allowing me to experience the RFP process from the two points of view.
Trust is so critical when organizations meet to work on ambitious construction projects. And RFP are the first chance for owners and GC To start creating the type of confidence that drives the best results.
Nancy Novak
Courtesy of compass data centers
I have made an approach in the way in which the compass data centers carry out RFPS and the result has been a level of collaboration with our GCS that has been a huge engine for innovation, for the driving of efficiency and the reduction of costs, to accelerate the deadlines for delivery and to promote advances in quality, sustainability and safety of workers.
Adversaries vs. Partners
RFPs should be the start of an association. But so often, the result is exactly the opposite.
RFPs are usually written, emitted and made with a mentality that both parts of our industry participate in a zero sum game. It is clear to see in the language of the RFP and the meetings that follow: the assumption is that this process will end with a winner and a loser in terms of finance, risk and more. This immediately puts both parties in a defensive position where people at the table are not a potential partner, but an adversary.
I understand how we have come here. Everyone in our industry has a trauma of the offers that have gone wrong, leaving one side or another losing money or that is upset with the consequences of the unbalanced risk. Given these unpleasant experiences, I think our industry has left the concern for contractual language, which should be left much later in the project’s life cycle, abducting the RFP process.
In doing so, it converts the proposal processes into a preliminary battlefield due to risk problems that only hurt the early stages of conversations between owners and GC. It’s like being in a first date and starting an argument on who hypothetically would get the dog’s custody if there is a divorce. This is no way to start a relationship, in dating or under construction.
This dysfunctional, trauma -driven approach causes damage to both owners and GCs at unacceptably higher costs, frustratingly inefficient processes to achieve distorted agreements and relationships that inhibit collaboration and innovation. It also adversely affects the most important goals in this business: to deliver on time, build quality and do everything profitable.
A call to change
That is why we desperately need a new approach to the RFPs of our industry. We should stop using RFP to fight the first battles for the terms that will be in the right to administrative remedies and sections of the contract. Focusing RFP processes so strongly on risk management is not conducive to establishing an association that successfully leads a project from concept to reality.
Instead of focusing the RFP process on legal maneuver, the emphasis should be an open dialogue that remains both in the field of secular terms as possible instead of referring to Legalese who make GC feel less as a potential partner and more as someone who is not confident.
At a time when the owners need contractors more than ever due to the labor crisis and the number of projects that are in the maintenance of patterns due to lack of GCS to build them, causing contractors to feel that they are simply a bad business.
The owners, on the other hand, need the GC to be their partners and they should start with the RFP process. The RFP should give GCS the opportunity to show its strengths and the best ideas for the planned project. To give them this opportunity, the owners must stop writing RFP to focus on the structure of the business relationship and focus more on the media and the methods of achieving the shared goal.
RFPs provide the highest value to the owners when these proposals and meetings include open discussions on how contractors can apply their experience and creativity to solve complex problems.
In fact, to ensure that this collaborative discussion does not fall into the trap of being a early battlefield, I recommend that the process start before the RFP is prepared through pre-rfp dialogues. This seeks to entry GC on how the project’s objectives should be expected and the best way to design the RFP to achieve these goals. It is also how members work with one another: with open communication that generates understanding and confidence, at the service of achieving a common goal.
This is particularly valuable to generate innovative ideas for the adaptation of the site that probably drives minor costs, faster terms and better results. The owner may have a project vision, but you need the contractor’s perspective to shape the strategy to adapt the plan for a particular place. Their suggestions will be essential to define the scope of the work in the correct way. When RFPs are structured so that stimuli opens a dialogue and solving collaborative problems, this type of communication is rarely produced.
When I am given the opportunity to act as true partners, again and again I have seen the contractors increase, embrace the opportunity and bring huge ideas to the table that improve the projects each time.
As owners, we have the ability to generate a positive change with the way RFPs in our industry. It’s time to take this opportunity and I think there are enormous competitive advantages for the owners who do it.
Market conditions make owners more difficult for owners to take urgent projects. GCs are in great demand and have their selection of projects to work, and they want members who want to share risks fairly, to give voice to contractors in the process and the RFPS approach puts a basis for collaboration. The owners who show that they really have a collaboration mentality are those who will be successful.
