RFP responses: Five legal points to include (though Procurement’s nose may get out of joint)

Smart vendors are judicious about investing time and resources in a response to a request for proposal (“RFP”). They don’t want to waste the effort if it turns out they were never a serious candidate for the customer’s business, because they were just “column fodder” — that is, the customer’s procurement people had already chosen a particular vendor, but wanted to through the motions of getting competing bids anyway.

[EDIT 2018-05-19:  Mark Suster recounts how a sales coach once explained to him that “if you didn’t help shape the RFP somebody else did and you’ve already lost,” and that if you can’t get at least a short meeting to figure out the customer’s needs, “you’re already dead so you’re better off to spend your time with another lead.”]

With that in mind, here’s a “canned” preliminary legal response that I’ve found useful for vendor clients to attach to RFP responses when they don’t know whether they’re truly in the running for the business. Feel free to edit the text below for use in your own responses — of course, you shouldn’t rely on the text as a substitute for legal advice about your particular circumstances.

Warning: Once in a while, the customer’s procurement people can get their noses out of joint when vendors don’t fall all over themselves catering to the customer’s every whim. So, give some thought to whether you’d fatally p*** off Procurement by including this text in your response — and if so, whether you can live with that.

(That’s why many of the points below try to explain why the vendor is taking the positions it is. The hope is that the customer won’t reject the vendor for supposedly being an arrogant so-and-so.)

[Text follows:]

1. Only the final contract document can be binding

Detailed legal reviews and comments for RFPs involve some cost. Because those costs must eventually be covered by our pricing, our general policy is not to incur them at the initial RFP stage, and instead to wait until it is evident to both sides that we are likely to win the business.

(We take very reasonable positions in negotiating “legal T&Cs,” which we would be happy to confirm by sending you our standard contract form.)

Consequently, until both sides have agreed on and signed a final written contract, we do NOT agree, and we OBJECT, to the terms and conditions of an RFP or of any attached contract drafts, EXCEPT FOR the confidentiality obligation stated in paragraph 5 below.

2. Comments about future products or services are for your general information only

Our response to your RFP conceivably might describe a particular function or feature that we expect to release in a future product (or a future version of an existing product), or that we expect to include as part of a future services offering. If so, we are providing that information solely for your general information and not as a contractual commitment. If you need for us to make such a commitment, we would be glad to discuss that on a case-by-case basis, and to include whatever terms we agree to in the final written contract.

Here’s why: If we were to include a future-deliverables commitment in the final contract, that could affect the timing of our ability to recognize revenue. Certainly revenue recognition is our problem, not yours. But revenue-recognition issues could affect our willingness to offer the pricing and other terms you prefer, in the time frame you need.

3. Our RFP responses can be incorporated into the contract only on a case-by-case basis

Some customers want to incorporate particular portions of our response to an RFP into the contract as warranties or promises. We would be glad to discuss that with you on a case-by-case basis.

But we do NOT agree, and we OBJECT, to any blanket statement in the RFP, to the effect that the RFP and our response will be incorporated into the contract in their entirety.

We try hard to ensure that our RFP responses are accurate. But because of the number of RFPs we process, at this stage of the process we cannot subject each of those responses to the same (costly) level of technical scrutiny that we give to our contractual warranty commitments.

If this will be a significant concern for you, it would save time for both you and us if you could indicate which specific points are particularly important to you, so that we can focus on those points early on.

4. Our exceptions to your RFP statements might not be a complete list

We will make reasonable efforts to explain any conditions, exceptions, or limitations (if any) in our RFP responses. But we do NOT agree, and OBJECT, to the idea that, if for some reason we do not object to a particular point in your RFP, then we have permanently waived the objection and are required to accept that point as part of the final binding contract.

5. Our confidentiality obligations are limited unless we enter into a separate confidentiality agreement

We will treat as confidential any non-public information that we first received from you in our discussions about the transaction contemplated by your RFP (other than information that we also receive from other, non-confidential sources, or that we independently develop ourselves).

We will be happy to discuss including suitable confidentiality provisions in the final written contract.

We would also be willing to enter into a two-way nondisclosure agreement to protect both parties during our pre-sale discussions. We can provide a reasonable form of agreement if you wish.

Otherwise, though, for the reasons summarized in point 1 above, we do NOT agree, and we OBJECT, to any confidentiality provisions in your RFP itself.