Basics 7 of 7 · Oil and gas industry basics
Three kinds of RFP
An RFP that arrives from a stranger with a week to respond is usually not an invitation.
The words
- RFP, RFQ, RFI
- Request for proposal, for quotation, for information. A proposal asks how you would do it; a quotation asks what it costs; an information request is procurement doing research, sometimes with no purchase behind it.
- Bid list
- The vendors procurement invites. Policy usually sets a minimum number of responses, which is where the problem starts.
- Vendor of choice
- The company the end users already intend to buy from before the RFP is written. Often the one who helped write it.
- Cannon fodder
- The show's term for the bidders who were invited to make the count.
Procurement in this industry needs competitive bids on anything expensive, and policy sets how many. The show has been on the receiving end of what that produces, including from a major oilfield service company in 2024:
“if there's only a couple of companies that could do the work that prospect company reaches out to you out of nowhere because they just need somebody else to bid”
Source: When to Say No to a Deal and Toxic Customers, episode 102 of the Oil & Gas Sales & Marketing Podcast.
So there are, in practice, three kinds of RFP. One is a fair contest you were brought into early, where you have met the buyers and shaped the requirements. One is already decided, and your response exists to make the bid count legal. And one you help write, which is the version the field guide and the course spend their time on. The question that sorts the first two is whether procurement will let you meet the people who will use the thing. If the answer is no, the show's advice from two different guests and both hosts is the same.
Which RFP are you holding?
A fair contest
The tellYou met the end users before it arrived, and procurement will let you meet the decision team.
The moveRespond, and shape the answer around what they told you.
episode 13 and episode 37Already decided
The tellIt came from a stranger, out of nowhere, with five or seven business days to respond.
The moveThe show's advice is not to respond: you are there to make the count.
episode 102 and episode 13One you help write
The tellYou are the expert they ask, before the RFP exists.
The moveVolunteer to help write it, and keep it ethical: make sure what you do best is in the questions.
episode 13
There is a fourth way: position yourself as a unique vendor offering services outside what the MSA covers, and the show says you can bypass the RFP process. episode 42
More from the show
The number is a policy, not a preference, which is why the invitation can be sincere and the contest still closed.
“procurement will have a number. So we need five, we need 10, we need 12 responses to this RFP.”
Source: The Fundamentals. How to Add New Logo’s and Customers, episode 13 of the Oil & Gas Sales & Marketing Podcast.
And the rule that follows from it:
“they won't let you meet the decision making team, don't respond to it. I'm telling you now, you're not going to win it, you're wasting your resources.”
Source: The Fundamentals. How to Add New Logo’s and Customers, episode 13 of the Oil & Gas Sales & Marketing Podcast.
A guest on the show gives the same test from the buyer's side: ask supply chain to put you in front of the end users, and read the answer.
“they already know who they want the vendor to be, but they're required by internal policy to have three or four quotes”
Source: You Have the Meeting, So Now What? With Guest Warren Spiwak, episode 37 of the Oil & Gas Sales & Marketing Podcast.
Five bids on file, one already chosen
- The vendor of choicechosen before the RFP was written
Outlined: there to make the count.
The tell the show gives is the timeline.
“if they come out of nowhere and they need an RFP response in five or seven business days you're probably cannon fodder and you're probably wasting your resources”
Source: When to Say No to a Deal and Toxic Customers, episode 102 of the Oil & Gas Sales & Marketing Podcast.
There is one way around the process, and it is a positioning decision rather than a sales tactic.
“If you can position yourself as a unique vendor offering unique services outside of what someone can do on the MSA side of things, you can bypass the RFP process.”
Source: Shortening the Sales Cycle, episode 42 of the Oil & Gas Sales & Marketing Podcast.
Before the next call
Did this RFP come from someone you have met, and will they let you meet the decision team before you respond?
