As many professionals and business owners are well aware, there is often a tension between what is best from a business development perspective and what is best from a legal perspective. This is certainly true when it comes to submitting RFP responses. Businesses should generally pause for a moment before submitting RFP responses and consider taking steps to further protect themselves from a legal perspective, including, for example, the following:
- Approaching the RFP process with the seriousness it deserves. Typically the RFP and the response (or at least certain portions) will automatically become part of the resulting legal and binding contract if the requestor accepts the bid. RFPs sometimes include terms and conditions with onerous and surprising language related to indemnification, confidentiality, representations and warranties and other important provisions that a business would never typically accept without negotiation during a more traditional contracting process. It’s advisable to have RFPs and RFP responses reviewed by legal counsel so that the organization’s leadership understands the related legal and business implications.
- Taking care when drafting answers to RFP questions. Although RFP questions may seem to call for standard marketing hype responses, responses should be prepared with greater precision as RFPs often specify that responses become part of the binding contract as mentioned above. For example, it is unfortunate when seemingly innocuous or casual answers create unintended liability or a commitment to furnish products or services that are not reflected in the proposed fee structure. Responders should generally avoid simply attaching a marketing brochure or a white paper in response to questions unless it is clear from the RFP that such items are merely informational and will not be part of the contract. Marketing brochures and white papers are typically not written in a manner suitable for contractual commitments.
- Strictly following all instructions set out in the RFP. RFPs sometimes require responders to take certain actions in order to preserve rights and opportunities. For example, the instructions may indicate that confidential, proprietary and trade secret information needs to be identified in a certain manner.
- Introducing additional terms in an effective manner. RFPs often restrict the ability of the bidder to incorporate additional terms. Merely attaching standard terms and conditions to an RFP response may be unacceptable to the requestor. Most RFPs will provide instructions for the bidder to address objections to the contract’s terms and to propose additional terms. Such instructions should be followed to the letter. Because bidders do not want to spend significant time (or their attorney’s time) on terms and conditions at the initial response stage of the process, most RFPs allow certain shortcuts to be taken to permit specific provisions to be negotiated later in the process. Legal counsel can often provide appropriate wording to achieve such flexibility.
- Understanding that RFPs are subject to the Public Record Laws of many states. State Public Record Laws may allow even direct competitors of the RFP responder to request a copy of the RFP response submitted to a public entity–even if the RFP response does not result in a winning bid. Although Public Record Laws vary from state to state, typically the laws provide some ability to protect against the disclosure of trade secrets. Completing an analysis of whether the RFP response includes confidential or trade secret information prior to submitting the RFP may help to protect the company from inadvertent disclosures of confidential information in the future. Confidential and trade secret information should either be removed from the RFP or clearly and prominently identified as such in the response. If possible, when a Public Records Act or similar disclosure law is implicated, the responder should require that the RFP requestor provide the responder with notice and an opportunity to object to any disclosure of information set forth in the response to third parties. When possible, it’s advisable for the parties to enter a non-disclosure agreement protecting their respective confidential information.
- Reviewing the proposed RFP response from a regulatory compliance, risk management and political perspective. RFP responders should consider whether they are subject to contractual or regulatory confidentiality obligations that would prohibit the inclusion of any of the information set forth in the proposed response. Sensitive information such as patient information and social security numbers should never be included. The response should also be reviewed to determine whether statements could be misconstrued as admissions of regulatory noncompliance or be otherwise used against the respondent. RFP responders should also identify potential ethical or political conflicts of interest that could result from a successful bid and then resolve such issues as appropriate.