I have worked on dozens of request for proposals (RFP) on major website redesign projects. The RFP process is the most common form of procuring web design and development services. For the most part, any given RFP document has a similar table of contents covering the organization's mission and background, current website limitations, objectives, and description of the scope for the project. There seems to be one piece information that many organization are unsure whether they should share - the project budget.
Those who do not share the budget with vendors believe that this will produce the best price for the services they need. Vendors will need to be aggressive and offer a best price proposal because they don't know what their competitors are offering and so don't want to be undercut. In addition, this method will help "keep 'em honest" and not offer a vendor the opportunity to build in too much profit margin.
With all due respect to my current and future clients I disagree strongly with the "do not share" approach and believe that sharing the budget (or a range or not to exceed amount) will ensure the vendor selection process is successful:
- By providing a budget, RFP responses will be similar in scope and allow for an easier apples to apples comparison across many bids.
- Comporting to a budget forces the vendor to prioritize the major tasks and helps the organization get the most for their money.
- If the vendor feels like more budget is necessary, they must justify it.
- Ideally the organization has go through an ROI analysis to come up with a budget. Vendor responses will help validate it and the underlying assumptions.
- Makes it easier to evaluate and toss out the "it too good to be true" low-ball bidder.
Sharing a budget is also justified for one more reason. Price, while important, is often not the most important criteria. Approach, methodology, capabilities of the team, and past perforamance are typically weighted much higher in the decision. So share your website redesign budget in your RFP. You'll be much more likely to actually get what you pay for.