Developer

Download this spreadsheet to compare vendor bids

Comparing bids from a vendor doesn't have to be a complicated task. Here is some advice on some of the red flags that you should look for when considering bids and a handy download that you can use to track the process.


As a freelance Web consultant, I occasionally design, upgrade, or spec Web sites. Recently, a nonprofit organization hired me as a consultant to evaluate bids for the organization’s proposed new Web site. The organization’s goal was to hire someone to be its advocate—someone who could look at the bids with a critical eye.

If you are in charge of building your company’s Web site, or its first upgrade, you might consider hiring a consultant to be your advocate. If that’s not possible with your budget, then I recommend that you take the same objective, critical approach to evaluating vendor bids, just like a consultant would. In this article, I’ll describe how I evaluated bids from development firms for a Web site design project.

A download to help you compare bids
A comparison system to evaluate vendors doesn’t have to be complex in order to be effective. Download this basic spreadsheet to help you document and compare the bids you receive. This spreadsheet was designed to compare bids from firms proposing to design a Web site. You can modify the spreadsheet to compare bids for other projects.

Questions used to evaluate the development firms
The organization’s marketing director, who was in charge of the project, asked some very smart questions about the bids being considered from two development firms. She asked me to determine the following:
  • Does each firm understand the purpose of the Web site as set out in the specification they had received?
    For the most part, they did. But one design company went off on a tangent touting the firm’s ability to build in e-commerce, advertising, and sponsorship capabilities, features that are not realistic or needed by this nonprofit organization.
  • Is each firm professional and experienced?
    Both bids were submitted professionally, and the companies had good track records.
  • Are the bids fair, or are the firms overcharging for their services?
    The bid amounts were similar—in my judgment, both were overpriced by about $10,000.
  • Can I identify other problems or concerns that the nonprofit organization may have overlooked?

Obviously, I was asking these questions as a consultant who was working on behalf of a client. But certainly, an IT manager who is evaluating a bid should begin with these big-picture questions in mind. Too often, people in charge of planning get so bogged down with details that major project goals are overlooked.

Red flags to watch for
A concern about staffing cropped up when I studied the estimates. One company stated that a team of three staff members would be assigned to the job. It also estimated that it could complete the site development in less than two months.

When I factored in the company's estimate of 470 person-hours for the job, the figure seemed inaccurate. That time estimate worked out to about one month of full-time work per person. I was concerned, however, that the company’s small staff would not be able to meet our deadlines and deadlines from other clients. I marked this as a red flag—you most often have to pay heavily for miracles.

Both companies were eager to develop full-power database content management systems. Too eager, I thought. My client wanted a relatively uncomplicated site. While content would change, I didn’t see the need for an expensive content management system or extensive database links.

Some areas, such as an events calendar, could benefit from a simple database design, but I recommended that overall, the budget-conscious arts start with the basics and delay the adoption of technology bells and whistles.

After all, Web sites shouldn’t adopt technology only because it is available. It’s tempting to always use tools that are on the cutting edge, but the goal is to fit the Web site and its technology to the business case of the customer, not the reverse.

Content management systems concern me for another reason—even if the developer has previous experience and reusable code, this is an area that almost screams, “Cost overrun!” It’s important that both parties have the same understanding of the phrase “content management.” These systems can range from simple article displayers to complex systems with editing layers for many content types. They can cost tens of thousands of dollars or millions of dollars.

Content management systems rarely work as advertised. When the Web site evolves, the content management system has to scale as well, and that requires new templates, new programming, and more checks in the mail for the developer. It ensures new and lucrative projects in the future, which is why some developers like to build them.

I cautioned the nonprofit to be careful and to be specific in this area should it proceed.

Modify and customize your requirements
After reviewing the bids, I suggested that my clients seek at least one more bid for comparison. I also suggested that they would need a more detailed breakdown of the work to be done. I recommended several steps to ensure that the Web site design met the organization’s expectations, including the following:
  • Establish milestones to allow the nonprofit to properly evaluate and track the project.
  • Pay for some initial design work, with no agreement to continue. I made this recommendation because the nonprofit was especially concerned about the look of the site. Neither company had presented a design proposal.
  • Set a penalty for work that is completed late. To be fair to the designers, the penalty should only be charged if the lateness is not due to changes made that are outside the original scope of the project
  • Offer a bonus for work that is completed early. I am not certain if my clients adopted this suggestion, however.

When you negotiate to outsource a project, determine the goals that are most important to your organization and make sure that the bid or service level agreement reflects those goals. In this case, a primary goal was for the nonprofit to be satisfied with the look of the Web site design. Therefore, I recommended that the bid include preliminary design work.

When I was finished with the job, I felt I had performed a valuable service, not just for the nonprofit organization but for the bidders as well. Download this spreadsheet to help you document and compare the bids you receive for your next project.

What works for you?
Tell us about your negotiating skills. Post a comment to this article or send us an e-mail.

 

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