Tips for Drilling Contractors on RFPs
You open your email (or snail mail) and there it is, a formal RFP (request for bid) replete with multiple attachments. The cover letter makes it look like a good job, right in your company’s wheelhouse. Question is, do you respond? “Why not?,” you think to yourself. The work is close to the office and you’ve drilled near the site in the past. Before you spend time and money preparing a response to a formal RFP, let’s look at what may be involved.
First, open and read ALL the attachments. Reponses to some formal quotes may require a pre-qualification process that could be very complex and cumbersome. The qualification paperwork could mean you may spend several hours finding data to complete multiple pages of questions regarding your drilling experience, equipment, personnel and financial condition of the company. Some of the data you may feel is confidential, however not disclosing the data may preclude you from actually submitting a bid. You might be required to prove you are “safe enough” to work for the owner or consultant on the project site. That might mean providing your entire safety program for review, along with several years of safety history, in order to be deemed safety qualified for the project. And, finally, let’s not forget some projects require you be vetted by a third-party company (like ISNetworld, Pics or Browz).
Assuming you have completed and passed the technical and safety qualification process, you still have to decide if you want to submit a bid. You may have to attend a mandatory pre-bid meeting (more on that next month) and submit a full “technical proposal” with your bid. What is a technical proposal? It depends on the terms of the RFP. In some cases, the bidder is required to provide a document that details how they would complete all aspects of the work. This could require details of the specific drilling equipment, drilling method, names and qualifications of the drillers, bit types and type of drilling fluid. Many man hours could be needed to produce a technical proposal for the bid.
Most of the time the specifications state that the technical proposal will be used in conjunction with the unit prices to determine the most qualified contractor. The consultants/owners will state that one team will determine the most qualified bidder based on the technical response and another independent team will review the unit costs. Ultimately, the contract award would be based on a combination of the technical proposal and cost.
Let’s assume you decide to bid and send in the technical proposal and cost estimate. What happens to your highly detailed work product when you send it in? You hope it is reviewed by someone who has enough experience to understand what you provided. You also hope that the information you gave will really be used to determine the most qualified technical contractor. Here’s what may happen:
- Everything works exactly as the RFP states and the drilling project is awarded to the most qualified, cost effective contractor.
- You may get a letter stating that all the bids have been reviewed and the consultant is now asking for a best and final offer (BAFO). It’s very confusing and frustrating for a drilling contractor to comply with all the requirements of an RFP and then have to provide a BAFO. Oh, but wait, sometimes you may have to provide a second BAFO — I call these BARFOs — best and really final offer.
- The entire RFP may be canceled and you get to start the process over. In the worst possible case, the new procurement may be based entirely around your technical proposal. In other words, the consultant plagiarizes your work and sends it out as the bid package.
- You bid the work exactly as the RFP prescribes and the project is awarded to a competitor that proposed a different method. When you question the consultant the response is, “Well, his price was much lower than yours.”
- You call the consultant and hear, “Your group did not get the work. Thanks for the effort.
- ”What I think is the worst possible outcome: You hear nothing. You call the technical lead for the consultant and they tell you to call “contracting.” Contracting then tells you the project is held up with the technical team. Or worse yet, no one answers your calls at all. Consultants should know, drillers are tough and we can handle bad news. Just tell us if we won or lost. Have the common courtesy to respond, just as we responded to your RFP.
Drillers bid work all the time, and most of the time we are not dealing with a formal RFP process. Can it be difficult? Yes. I’m sure most drilling contractors have been down the RFP road and dealt with all of the above results. Just remember: You can’t win if you don’t play
So what do you do when you get the formal RFP? Review the documents, understand the time and money involved with the proposal effort, think about your relationship with the consultant or owner, look at your rig schedule and then decide, is it worth it? But if you decide not to participate in the process, send a short note to the consultant letting them know. Be nice, they thought enough of you and your company to give you the opportunity to bid the project. Just remember one thing, a BAFO is a perfect time to RAISE your price.