Request for Proposal Part I: Is an RFP Right for Me?

Lauren Wilson, Client Manager

Across all departments, all companies, and all industries one common (and often dreaded) task is that of releasing a Request for Proposal (RFP).  An RFP is simply the process of releasing a bid solicitation for a particular service to a range of selected vendors.   Larger companies may have a Procurement Department who assists in these ventures company-wide, or often a third party vendor is used to administer the sometimes daunting task.  In our business, as Benefit Consultants, going out to market with an RFP is a pretty common occurrence.  Not only do we receive RFP’s from potential clients inquiring about our services, but in our role as brokers we market our clients major benefit plans as well as services for ongoing initiatives like Wellness or Employee Assistance Programs and one-off projects such as a dependent or claims audit.

In some ways, the RFP process can be a bit like spring cleaning in that it’s a huge, time-consuming task but if you do it right can be majorly rewarding.  While the reward for spring cleaning is a calming effect brought on by a light and airy home free from the heavy clutter accumulated during winter; the reward for a properly executed RFP can be a helpful new vendor, refreshing a current relationship with a current vendor, a valuable benefit addition or change, or even measurable cost savings.   While the benefits seem obvious, a perceived negative of releasing an RFP is the work that goes into creating the request and making a decision.  However, as a consultant, we are more than happy to take this burden off our clients by managing the process and assisting you with making the final decision.  When evaluating whether an RFP is right for you, some questions to consider:

When did you last market your plans and or services?

We recommend that our clients do a market check every few of years, even if they’re happy with their plans and carriers due to the increasing cost of providing benefit insurance to employees and the need to stay competitive.  The world of Health and Welfare Benefits is constantly changing, therefore a plan or service that was competitively priced three years ago may not be so today.  One area that we often see this is with rates that were implemented at the start of ACA, as there was a lot of uncertainty on what to expect which is sometimes reflected in the pricing.  Now that things have leveled off a bit, we’re seeing some different approaches to pricing today than in 2012 or 2013.

Are you confident in the pricing and plan design?

Maybe you’re in a long standing vendor relationship and have excellent guaranteed rates – then            by all means, don’t waste time marketing!  You should feel great about the fact that your plan is running well, you’re partnering with a fair insurer, and your consultant is doing excellent work negotiating your rates.  Of course if this isn’t the case for you, that doesn’t mean the opposite is true. You might have a great consultant and carrier but you’ve had a bad year with claims.  In this case the carrier would be forced to pass on a steep increase during renewal and our recommendation would be that we create an RFP and see if we can find a way to control the cost.

Are you satisfied with the level of service you’re receiving?

If you’re unhappy with a carrier or vendor hopefully your consultant is already working with the team to have that corrected, but unfortunately sometimes it’s just not possible.  As much as we hate it, sometimes a particular vendor just isn’t the right match for a client’s needs.  The importance of great service cannot be over stated and a vendor failing to meet the needs of a customer would result in a strong recommendation to initiate the RFP process.

Do you have a trusted advisor to manage the process?

We would not recommend that anyone take on this task without the assistance of a consultant who is familiar with the process of an RFP and understands your needs from the perspective of strategy, company culture, cost, and service.  They should be your advocate and ally with the vendors and your partner and advisor when it comes to decision making.  Trust me you do not want to feel like you’re on your own wading through the countless pages that will be returned to you in response to the RFP.  More on that in Part II of this blog. 

Now that you’re more comfortable with the process, it’s time to start your “Spring Cleaning”. Remember, just because you go to market doesn’t mean that you have to choose any of the proposals you receive.  Sometimes it can be a useful benchmarking tool that your broker can use to negotiate with a current carrier – or perhaps you decide that you’re not ready to add the new plan you marketed, but now you’ve gained a valuable tool to aid in explaining cost and strategy decision to employees or executives.  You’ve got nothing to lose except clutter!

We at Craford Benefit Services would love to hear from you, if you’d like to find out more about the services we provide, please see contact information below.


About the author:

Lauren Wilson is a Client Manager in the Charlotte office. She joined the Craford team in 2011 and spent her first year as a Benefit Administration Specialist before transitioning into her current role. Her primary responsibilities include: serving as a day-to-day contact for clients; communication with vendors; issue resolution/problem solving; project management; and development and execution of strategy.

With 10 years of progressive experience in Human Resources Management (with a focus on employee benefits) prior to joining Craford, Lauren is able to analyze situations and challenges from the client perspective and enjoys taking a hands-on approach with communication and strategy. She received a Master of Arts degree in Labor and Industrial Relations from Indiana University of Pennsylvania and holds a Bachelor of Science degree in Journalism from West Virginia University.

Customer satisfaction is of the utmost importance to Lauren and she takes pride in engaging with clients and colleagues to build long-term sustainable partnerships.