Hey RFP’s - You have a problem
Welcome to the third instalment of our blog series on procurement and equity. In our previous articles, we discussed the broader equity issues with procurement practices and policies. Today, we focus on the Request for Proposals (RFP) process, a critical component of procurement, and how it can either promote or hinder equity.
The RFP process is a common method organizations use to solicit bids from potential suppliers for goods or services. An RFP typically includes detailed requirements and evaluation criteria that suppliers must meet to be considered for a contract. While the RFP process is designed to be transparent and competitive, it often contains inherent biases that can disadvantage marginalized businesses. The key equity issues with RFPs that we see emerge over and over again, regardless of industry include:
Complexity and resource demands
Bias in language and criteria
Lack of equitable evaluation frameworks
Limited Access to Information and Networks
Let’s dive in
Complexity and Resource Demands
RFPs often require detailed proposals, extensive documentation, and compliance with complex regulations. For small businesses, particularly those owned by racialized, Indigenous, or disabled individuals, these requirements can be overwhelming. The resources needed to prepare a competitive proposal—such as time, expertise, and financial investment—are often out of reach for smaller enterprises. According to a study by the Canadian Centre for Diversity and Inclusion (CCDI), 60% of small minority-owned businesses reported that the complexity of RFPs was a significant barrier to participating in government contracts.
Bias in Language and Criteria
The language and criteria used in RFPs can inadvertently favor certain types of businesses. For example, RFPs often emphasize previous experience with similar contracts, financial stability, and scale, which tend to favour larger, established companies. These criteria can exclude innovative but smaller firms that may not have an extensive track record but offer valuable perspectives and solutions. An analysis of RFPs issued by a major Canadian city found that 70% of contracts were awarded to companies that had previously worked with the government, creating a cycle that favored incumbents and excluded new, diverse entrants.
Lack of Equitable Evaluation Frameworks
RFP evaluation frameworks often prioritize cost and technical criteria over social value and equity considerations. This narrow focus can result in the exclusion of businesses that contribute to broader social and community goals, such as local employment, diversity, and environmental sustainability. In Ontario, an audit of municipal RFPs revealed that less than 10% included criteria related to supplier diversity or community impact, despite growing recognition of the importance of these factors.
Limited Access to Information and Networks
Access to information and professional networks is crucial for successfully navigating the RFP process. However, minority-owned and marginalized businesses often lack the same level of access as their non-racialized counterparts. This lack of access can prevent them from learning about RFP opportunities, understanding the requirements, and building relationships with key stakeholders. A survey by the Canadian Aboriginal and Minority Supplier Council (CAMSC) found that 55% of Indigenous and minority-owned businesses were unaware of government RFP opportunities, compared to just 25% of non-racialized businesses.
To address these equity issues, organizations can adopt several strategies:
Streamlining RFP requirements and reducing unnecessary complexity can make it easier for smaller and diverse businesses to participate. This might include offering simplified templates, reducing documentation requirements, and providing clear guidelines.
RFPs should be written in plain language and include criteria that value diversity, social impact, and innovation. This can help level the playing field for businesses that may not have extensive prior experience but offer unique and valuable solutions.
Including a diverse range of voices on RFP evaluation panels can help ensure that decisions are made with an equity lens. This can reduce the risk of unconscious bias and ensure that a broader range of perspectives is considered.
Proactive outreach to minority-owned and marginalized businesses can help ensure that they are aware of RFP opportunities. Additionally, providing training and support to help these businesses navigate the RFP process can improve their chances of success.
Regularly reviewing RFP outcomes and tracking the diversity of suppliers can help organizations identify areas for improvement and hold themselves accountable to equity goals.
The RFP process is a powerful tool that can either perpetuate inequity or drive positive change. By addressing the equity issues inherent in RFPs, organizations can create more inclusive procurement processes that open up opportunities for a broader range of businesses. In our next article, we will explore real-world examples of organizations that have successfully implemented equitable RFP practices and the benefits they have achieved as a result.
As always, we welcome your thoughts and suggestions as we continue this critical conversation about procurement and equity. Stay tuned for our next article, where we will share success stories and best practices in equitable procurement.
References
Canadian Centre for Diversity and Inclusion (CCDI). (2022). Barriers to Participation in Government Contracts. Retrieved from https://ccdi.ca.
Canadian Aboriginal and Minority Supplier Council (CAMSC). (2021). Access to Government Contracts: Challenges for Minority-Owned Businesses. Retrieved from https://camsc.ca.
Government of Canada. (2021). Equity in Procurement: A Review of RFP Practices. Retrieved from https://www.canada.ca.
Office of the Procurement Ombudsman. (2019). Study on Supplier Diversity. Retrieved from https://opo-boa.gc.ca.
