Clarifying confusion in shipbuilding procurement
As the federal government moves forward with the National Shipbuilding Procurement Strategy, there is still considerable confusion in government circles about the distinction between Invitation To Tender and Request for Proposal.
In Canada, Invitation To Tender (ITT) and Request for Proposal (RFP) are regularly used synonymously or have been redefined to mean a combination of the two. In fact, they provide two very different means to achieve the same objective: a contract to procure a product or a service.
An ITT is a clearly defined piece of work that can be evaluated against well defined criteria. A tender would then be accepted based upon the lowest price without negotiations. It is difficult to challenge.
An RFP is a largely undefined product where the customer is reaching out to suppliers to offer solutions to meet the customer’s objective or operational needs.The evaluation is based on what comes closest to meeting the operational needs. It can be readily challenged if not properly administered, evaluated or perceived by the bidders.
Both a tender and RFP must be responsive, meaning a bid, tender, proposal or quotation that meets all the mandatory requirements stipulated in the solicitation document. This is synonymous with a valid bid.
In the Marine Sector of the government of Canada, generally speaking, ITTs are used in ship repair where the work can be clearly defined; RFPs are used in ship construction where different solutions can deliver a product that meets the operational need.
While the two should have evaluation criteria, the ITT is actually based on lowest price. It is not mandatory for it to have a written set of criteria. It only needs to be responsive to the solicitation document. On the other hand, because an RFP is not clearly defined it is mandatory that it have a set of evaluation criteria and that criteria must be supplied to the bidders. The criteria are focused on the company, its corporate health and its ability to undertake all aspects, technical and non-technical, of a product from concept to delivery.
The difference between the two lead to two completely different responses from bidders. And those differences lead to cleaner, more responsive bid packages. In that context better solutions can be introduced that can include evolving technologies which, among other things, saves money through the construction and lifecycle of the product.
On November 26, the Shipbuilding Association of Canada, in partnership with Vanguard magazine, will host a one-day forum on shipbuilding where leading edge technologies, improved production and procurement processes will all be part of a dynamic conversation.
Join over 200 government and industry leaders to learn more about Canada’s excellence in shipbuilding. Register now to take advantage of the Early Bird rate! For details and program, click here.
Vice Admiral (Ret’d) Peter Cairns is president of the Shipbuilding Association of Canada. A qualified submariner, he served for 37 years in the Royal Canadian Navy, including as commander of the RCN and commander of the Pacific fleet.