Writing an RFP for MFDs

Printing and Mailing Services at the University of St. Thomas recently consolidated its many copier leases into a single competitive-bid deal for 147 multifunction devices. Find out how you can do this too—and save your organization money.

By John Barron

Things had gotten out of hand at the University of St. Thomas. By the beginning of 2005, we were juggling a series of copier leases with different ending dates and with numerous vendors. Our university was clearly not getting the best deal.

To rectify this, I assembled a project team to determine our requirements and select the capabilities we needed. From there we negotiated a single-vendor, single-contract program. As a result, in May, we installed 147 multifunction devices (MFDs).

The motivating factor that got me to spearhead this project was total cost. In the Twin Cities of Minneapolis and St. Paul, we are fortunate to have lots of competition amongst copier/MFD vendors. But as long as we have leases that aren't co-terminus, we tend to stay with the same vendors year after year. We needed to break that cycle and get all of the vendors to compete for our business.

At our university, after the bidding and negotiations were complete, the winning vendor was Marco, a Minnesota-based vendor that proposed a fleet made up of HP 4345 MFDs along with Sharp 355, 455, 550 and 620 MFDs. We chose to go with fully featured multi-function devices, which scan, print, fax and copy, rather than simpler copiers because we have far too many stand-alone networked printers, stand-alone fax machines and stand-alone scanners on campus.

By acquiring MFDs, and getting support from the highest levels of administration and our IT group, we can systematically reduce the number of devices that depreciate, need supplies, repairs, etc. The cost savings can be substantial.

Friends in High Places

As you begin the process, it's important to get the full cooperation and participation of your organization's Information Technology (IT) group. After all, the MFDs, when connected, reside on their network, so you have to play by their rules. You should probably get one or two IT people on your project team. These IT people must be working managers who have direct access to the highest levels of IT Administration.

Start researching and drafting your Request For Proposal (RFP) about a year in advance. And don't feel you have to start from scratch. Look to others who have already gone through the process. I based our RFP heavily on the RFPs from two generous colleagues, Michael Lloyd from Louisiana State University and Ray Chambers from Juniata College. Vendors may also have examples of RFPs that they will be willing to share with you.

If you are the copier expert at your organization, I recommend that you create a first draft on your own. Then call on your project team to help you refine it. Keep in mind that you will certainly need help from people who may not be on your team, such as electricians to tell bidders about your power, Accounts Payable to tell bidders about high-tech payment methods, IT to tell bidders about phone lines (for faxes) and data lines (for network connections), etc.

Finalize your RFP with your company's legal department, as well as an expert in the copier field, such as a consultant. Completely outline all of your machine, service, billing, network and all other requirements in your RFP. Vendors will look for any place they can to reduce their bid amount, and this will bite you in the rear somewhere down the line if your RFP doesn't cover all of the bases.

Gather Your Committee

Form a selection committee of about five people who are dedicated and connected to decision makers at the highest level. Our committee included myself (director of Printing and Mailing Services), my boss (associate vice president of Auxiliary and Administrative Services), the director of Purchasing Services, an IT manager and a representative from our IT department's rapid response team.

Ideally, your committee will solicit input from your community without allowing others to make the final decision on who the vendor will be or what equipment is placed.

Next, decide whom you will invite to the bidding party. Keep an open mind, but try not to invite more than 10 vendors. (Several vendors may want to submit more than one proposal.)

Hold a pre-bid meeting for all vendors and ask them to notify you of their intent to attend. If they choose not to attend, eliminate them from consideration. Likewise, if they show up late and miss any of the discussion, eliminate them.

The purpose of this meeting is to answer questions they may have on the RFP, which they have had at least a week to review, and to emphasize certain aspects of the proposal. Have someone from your organization there to act as secretary. Documentation of questions asked and answered at this meeting may prove useful later.

After this, review their proposals and select two or three finalists, being as fair as possible so no one has an excuse to grumble later (even though all but one will).

Our ultimate goal from the potential vendors was two all-inclusive costs per copy: a cost for the first eight million clicks, which we would guarantee as a minimum, and a cost for all "overages." Presumably, the bidders would recover the cost for the hardware, maintenance, supplies and profit in this first eight million, and recover only maintenance, supplies and profit on the remaining clicks.

Based on our historical annual volume (on copiers) of about 13 million, we were able to quickly rate all proposals based on expected total cost per year. This created a natural break after four of 14 proposals, and six of nine bidders. The difference between the lowest bid and the highest bid was over $250,000 per year.

Have finalists bring in equipment for end users to see, touch and get demonstrations on. Have a separate, technical session for your IT group. Allow finalists to make presentations to the selection committee.

Rate each finalist on the selection criteria as listed in your RFP. Criteria can include:

• Price

• Compatibility with your network

• Compatibility with your plans to implement a tracking tool

• Their plan to provide training, technical support and repairs

Each criterion can be weighted differently. Assign a total score to each finalist, with the highest score going to the winner.

Negotiate With the Winner

Clearly state in your RFP, and throughout the process, that the selected vendor will be invited to "enter into negotiations" for a contract. Make it clear that they don't automatically get awarded the contract.

During this entire process, you may learn that the specifications that you gave in the RFP don't align perfectly with what you need. Rather than change the specs for the bidding process, change the specs for the negotiation process with the selected vendor. The important thing is that all bidders bid on the same thing.

Don't be surprised if the negotiated price ends up higher than their original bid. (It's kind of like buying a new car.) The vendor will probably want to use its own contract template. Be sure your purchasing department has ample opportunity to provide input to how the contract is worded.

Plan and Schedule Installation

While the contract is being hashed out between your purchasing department and the vendor (if you are confident you will come to terms), move ahead with scheduling removals and installations. Review your old agreement with the incumbent vendor to see who actually "owns" each piece of equipment, and what charges there may be for removal.

In a perfect world, removal of old equipment and installation of new equipment happens simultaneously. In the real world, your old leases may expire on different dates. Regardless, it's very important to have your new agreement end on a specific date for all devices, no matter when they are finally installed. That way, you can go out for competitive bids every three or four years. (Five years is probably too long, given today's rapid changes in technology.)

If your old machine's lease due dates are staggered, you can either replace the later machines when they come due or buy out the leases on the later machines so the replacements happen simultaneously. Usually the lease buyouts equal the sum of the remaining payments.

Training Time

Once the contract is signed your work is not done. You've still got scores of future users who don't know the first thing about how to operate this new gear. You've got to get them trained.

I set up a training room on each of our two main campuses with examples of the most common models of machines. All training machines were connected to our network. Key users were urged to attend one of the 30 one-hour sessions. I tried to limit attendance to five or six people per session so that they could get up close and personal with the machine. Feedback from the sessions indicated that one hour wasn't enough time to learn all of the features on a modern MFD.

Follow-up training was conducted in a less formal fashion with the vendor's trainers going department-to-department following a more casual schedule that was communicated to users ahead of time.

Even after training is completed, you'll need to keep a line of communication open with new users. I created an e-mail distribution list of all key operators and send a weekly e-mail update. My department also keeps its Web site updated. Operators can order toner and staples through this site. Our campus courier fills orders and delivers items several times a week. The on-site service technician (a vendor employee) takes weekly inventory of the supplies and reorders from their warehouse as needed.

We chose to have our IT group's Tech Desk receive all service requests initially to determine if the problem is related to the network or the MFD. If it's the MFD, then a service request is placed on the vendor's Web site by the Help Desk. If the problem appears to be network related, then the IT group's Rapid Response Team visits the user.

The past year has been a busy and often hectic one, but the benefits for my university have been great. We now have a single contract for the latest, most appropriate MFDs, negotiated with the university's best interests in mind.