Same Old Process, New Considerations

Departments - Critical Thinking

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April 15, 2013
Harvey Gershman

The more things change, the more they stay the same. In 1976, I wrote an article in Waste Age, “The ‘RFP’ Bug and Its Problems.” Some of the news headlines then read that we landed on Mars and that oil prices were up. Today, we are still exploring Mars and reducing our dependency on foreign oil, but we’re using some new approaches. The same is true with requests for proposals (RFPs).

Today’s waste-to-energy (WTE) and emerging conversion technology projects continue to befuddle the RFP process where waste is used as the original feedstock. Public/private partnerships (PPPs) can help alleviate the complexity and risk and help advance development of these technologies and projects. In a PPP, each party brings unique strengths to the project. If the project involves publicly controlled waste or requested services, then a public process is generally needed, and an RFP, or variation of it, is needed. When the public sector is approached by a developer to “partner” without an open and objective procurement process, difficulties can be expected. These include public perceptions or legal challenges by other parties.

Despite the PPP, much about the RFP process remains unchanged today. Planning and research remain the core elements. A review of available technologies, funding sources, waste availability, site alternatives and public acceptance is key. Research should be conducted to assess the disposal situation; local or regional energy and materials markets; and any financial, legal and political constraints. This is also the time to determine whether there are opportunities for a PPP and which entities would make ideal partners. This research phase should help build a clear picture of project scope and need.

To start the procurement process, a Request for Information (RFI) can be issued to qualify partners. The RFI asks for a firm’s experience, technological approach, system description, financial information, experience with similar projects and risk posture. Or skip the RFI and just issue the RFP. This is OK as long as the project concept or request is very well defined.

Only a well-developed RFP will receive serious proposals. It needs to include significant background on the issuing agency and its history with regard to solid waste management and the state of affairs in place leading up to the RFP issuance. It needs to put forth a realistic schedule and detailed scope of services with the project’s objectives, risk allocations, size, future expansion and cost expectations. Assumptions regarding project parameters from waste quantity and composition, site data and facility plans, funding mechanisms and applicable regulations need to be delineated, along with submission requirements, evaluation parameters and contact information. Last, a strong RFP is best when it includes a well-developed draft service agreement with insurance and bonding requirements.

With expectations for transparency at an all-time high, the competitive RFP process is an excellent way to showcase good governance. The PPP helps address the complexity of projects and the risks associated with unproven technologies. A competent team of advisors (technical, management, financial and legal) will augment the issuing agency’s team in developing the RFP and overseeing the procurement process. Along the way, keep key decision makers informed and, if possible, involved in the evaluation process. A lot has changed since the 1970s, but not the basics of a sound RFP process.

Harvey Gershman, hgershman@gbbinc.com, is president of Gershman, Brickner & Bratton Inc., solid waste management consultants.