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 homeowners and contractors to perform massive issues. However there’s an issue. Far too usually, the RFP course of is dysfunctional in methods which are a lose-lose state of affairs for each homeowners 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 formidable building initiatives. And RFPs are the primary alternative for homeowners and GCs to start constructing the form 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 outcome 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 ought to be the beginning of a partnership. However so usually, the result’s the precise reverse.

RFPs are typically 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 comply with: the idea 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 folks throughout the desk should not a possible companion, however an adversary.

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

Doing so turns proposal processes right into a preliminary battlefield over threat issues that solely do harm within the early phases of talks between homeowners 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 may be ever a divorce. That’s no strategy to begin a relationship, in courting or in building.

This dysfunctional, trauma-driven strategy to RFPs causes hurt to each homeowners and GCs in unacceptably increased prices, frustratingly inefficient processes for reaching agreements and distorted relationships that inhibit collaboration and innovation. It additionally negatively impacts an important objectives on this enterprise: delivering on time, constructing with high quality and doing all of that profitably.

A name for change

Because of this we desperately want a brand new strategy to RFPs in our business. We should always cease utilizing RFPs to battle early battles over the phrases that might be within the Proper to Cures and Administrative sections of the contract. Focusing RFP processes so closely on threat administration shouldn’t be conducive to establishing a partnership that can efficiently convey a undertaking from idea to actuality.

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

At a time when homeowners want contractors greater than ever due to the workforce disaster and the variety of initiatives 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 unhealthy enterprise.

As a substitute, homeowners want GCs to change into their companions, and it ought to begin with the RFP course of. The RFP ought to give GCs an opportunity to indicate off their strengths and greatest concepts for the deliberate undertaking. To present them that chance, homeowners have to cease writing RFPs to concentrate on the construction of the enterprise relationship and to focus extra on the means and strategies of engaging in the shared goal.

RFPs ship probably the most worth to homeowners when these proposals and conferences embrace open discussions about how contractors can apply their expertise and creativity to resolve complicated issues.

In actual fact, to make sure that this collaborative dialogue doesn’t fall into the lure of being an early contractual battlefield, I like to recommend that the method begin earlier than the RFP is crafted by participating in pre-RFP dialogues. This seeks out GC enter on how the undertaking targets ought to be envisioned and the way greatest to design the RFP to satisfy these targets. It is usually how companions work with each other: with open communication that builds understanding and belief, in service of attaining a standard objective.

That is significantly precious for producing progressive concepts for web site adaptation which are prone to drive decrease prices, sooner timelines and higher outcomes. The proprietor might have a imaginative and prescient for the undertaking, however you want the contractor’s perspective to form the technique for adapting the plan for a given web site. Their options might be important to defining the scope of labor in the appropriate manner. When RFPs are structured in a manner that stymies open dialogue and collaborative problem-solving, that form of communication hardly ever occurs.

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

As homeowners, we’ve got the flexibility 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 homeowners that do.

Market situations make it tougher than ever for homeowners to seek out building companions to tackle pressing initiatives. GCs are in super demand and have their alternative of initiatives to work on, they usually need companions who need to share threat pretty, who give contractors a voice within the course of and whose strategy to RFPs lays a basis for collaboration. Homeowners that exhibit that they honestly have a partnership mindset are those who’re going to achieve success.

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