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Most organizations establish a set of mandatory requirements in the RFP. These requirements can be administrative, such as "Proposals are due by August 15 and must be received not later than 5:00 p.m. at the specified location." The requirements can also be technical in nature identifying a critical feature or functional capability. For RFPs with mandatory requirements, the evaluation process is at least a two-step process. First, the evaluators examine each supplier's ability to satisfy the mandatory requirements. Suppliers not able to do this are eliminated from further consideration. Second, the evaluators assign a score to each proposal based on the evaluation criteria (similar to the examples presented earlier).

Typically, evaluators establish compliance before doing the more detailed analysis. During this step, one or more evaluators review each proposal to ensure that all of the mandatory conditions have been met. A mandatory condition is a requirement that must be met without alteration. One example is the submission of the proposal by a specified time. If it is late, it is usually returned to the supplier unopened. Another example is a requirement that the supplier must provide 24-hour emergency service.

To ensure that vendors do not miss mandatory requirements scattered throughout the RFP, all of the mandatory requirements are often identified in one section of the RFP.

Many evaluators are uncomfortable eliminating a supplier from further consideration for failure to satisfy a mandatory condition - especially when the evaluator believes that the requirement is, in fact, only "highly desirable" and not really mandatory.

Mandatory requirements must be precisely defined and must be essential elements in the success of the project. For example, consider the following mandatory requirement: "Suppliers must have a local service office." Now, I presume that the concern of the purchasing organization was prompt service and travel time. As stated, this requirement is poorly defined and could cause a number of problems for the evaluators.

First, the RFP didn't state the type of service required. Was it for equipment repairs, software support, network support. Second, no service levels were given. Did they need 8-hour per day support? Or 24 hour support? Third, no mention was made of the level of expertise required locally. Did they require a very expensive, technical expert who might only be found at the supplier's head office or development facility?

It is awkward, risky, and sometimes embarrassing to declare a proposal non-compliant when the mandatory requirement was not stated precisely and could be interpreted several ways. In these cases, evaluators often declare all proposals compliant, examine the actual requirement more closely, and seek clarification from the suppliers. Evaluators often ignore ambiguous mandatory requirements and evaluate each proposal on its merits.

Some RFPs declare that "proposals not meeting all mandatory requirements will be rejected"; others are less clear and state that "proposals may be rejected". The use of the word "may" rather than "must" permits the evaluators some latitude. They can waive mandatory conditions which all suppliers failed to meet. They can also waive mandatory conditions which on close examination during the evaluation process have proven to be ambiguous. When "may" is used, the principle of treating each supplier fairly must prevail. Evaluators should expect complaints and protests from suppliers eliminated for failure to comply with a mandatory condition that was ambiguous, or not an essential part of the solution.

As a result of this process, each proposal is declared to be either compliant or non-complaint. Compliant proposals are evaluated further. Non-compliant proposals are eliminated from the competition after preparing a memo for the project file, and for senior management (in anticipation of a protest).

To ensure that suppliers understand the significance of key words such as "mandatory", many RFPs define the term and indicate that it will be identified by use of the word "must". Here are the definitions used by the State of Arizona:

Shall, Must

Should

May

The State of Washington elaborates on the definition and defines those circumstances which may result in elimination of the proposal from further consideration:

The vendor states that a mandatory requirement cannot or will not be met.
The vendor presents the information requested by this RFP in a manner inconsistent with the instructions stated by any part of the RFP.
Customer references report the vendor's inability to provide average (satisfactory) service or to comply with one or more of the mandatory requirements.
The vendor's references fail to send the customer reference forms as required, and/or by the time required.
The vendor fails to include information requested by a mandatory requirement.

It is both a common practice and a "best practice" to summarize all of the mandatory terms on one page in the RFP and reference the pages which describe each of the requirements in more detail. Here is a section from Nova Scotia's Handbook:

Within Budget as a Mandatory Condition

Often, "within budget" is a critical requirement but not defined as a mandatory condition. Suppliers are not always told the budget and this can present difficulties. There are several different approaches to handling this problem. Obviously, publishing the budget is the best but there are some compelling arguments raised against it in many jurisdictions. If your organization does not publish the budget, then it must include language in the RFP which indicates the type of solution you are seeking or the importance attributed to cost. For example, "we are looking for an economical solution" or "Cost is the overriding consideration."

Here is what one jurisdiction tells its purchasers if all the proposals exceed the unpublished budget:

cancel the procurement and perhaps also the project for which the procurement is being done; or
review your requirements and reduce them to the essential needs to be met. his will mean a new competition, with a new requirements documents and all the inherent delays and potential for complaints from the supplier community.

Some jurisdictions do not permit significant changes to the RFP or proposal through the negotiation process. For these, it is not proper, usually contrary to written policies, and sometimes illegal to identify the winning company and then approach them to determine how much of their solution they can deliver, not for their proposed price of (for example) $100,000 but for the budgeted amount of $50,000.

Make sure you understand the business case for the project since a procurement is part of a project. Ensure the project plan is well thought through. Assure yourself that suitable technology products and services are available at the prices you anticipate - before you finalize the project plan. This knowledge of products and services can be gained by talking to industry contacts, suppliers, and other organizations about suitable products and services before completing the development of the RFP document.

Ensure your requirements document contains only specifications that truly reflect program needs.

Include a tentative amount in the RFP. For example, a statement such as "we anticipate that the winning supplier will propose a solution whose total life-cycle present value cost is between $1.0 million and $1.3 million". This information will ensure that suppliers do propose solutions which are affordable, if those solutions exist.

Alternatively, structure the RFP so that the supplier proposes a solution which can be expanded as needed. For example, suppose you want to acquire services related to developing a complex training system, or training people. Your RFP could ask for a proposal to develop "UP TO" 3 training modules, or to provide training for "UP TO" 200 people, or a treatment program for "UP TO" 15 people. In this way, you can obtain a proposal for the product and select the quantity that is affordable.

Highly Desirable Versus Mandatory Requirements

The State of Connecticut issued an RFP to outsource "all IT services . . . so that such Agencies can completely exit the business of providing IT services and focus on their core function - the business of government." It only wanted large, world-class corporations to bid. Rather than imposing a mandatory condition such as "revenue of more than $1 billion per year", a condition that could be seen as restricting competition, they simply told their story in the RFP and defined the characteristics of the winner as "highly desirable":

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