Hiring a vendor has a lot in common with hiring an employee.
There is a difference between an independent contractor and an employee — a big one, according to the IRS's rules. Conceptually, though, seeking and retaining their services are variations of the same process.
A job description specifies what is expected of an employee. Likewise, you should start with defining exactly what outcomes you expect of a vendor/partner. Be careful to avoid stating how an outcome should be achieved except for necessary parameters, such as a compatible data format (see IRS rules again).
Be specific. Don’t assume that everybody uses the same terminology to define responsibilities. For example, proofreading has a range of tasks associated with it, much of which is often used interchangeably with other terms.
An employee search comes with a salary range. If a hiring manager finds that the range does not enable them to get the right person, the company usually goes back a step to clarify what they’re looking for to either justify the added expense or to decrease expectations.
Likewise, a vendor search should begin with a range in mind. Do your homework first to avoid wasting your time or a vendor’s. Resources for establishing a ballpark figure might include:
Many vendors refuse to publicize their rates for fear of turning off new clients who may see them out of context. For example, an hourly rate may give pause to a client who considers only how long the project would take their own staff to accomplish, not realizing that a vendor has speed that comes from both expertise and dedicated time — not to mention the increased quality that the vendor brings to the project.
Whether you use a formal RFP or an informal bid process, you need to start with a viable list of candidates. If you use a vendor with whom you have an ongoing relationship, it isn’t necessary to seek competitive bids every time. But, if it’s a new kind of project or it’s been at least a year since the last competitive bid, you should look at multiple vendors.
How do you find new possibilities for vendors? Possible sources include:
Check also with your current vendors who do related work for you. You may learn that they do indeed offer the services you're looking for. Make it clear, though, that this is a new project and their status as provider of the other services is no guarantee for this one.
You should evaluate bottom-line costs, of course, but also the quality of each proposal. Will the vendor meet your specs? Do they thoroughly understand what you are asking for? Do they offer anything new? Does the reply itself meet your expectations, such as being on time and well-written? Are you impressed with the samples and/or reference work?
Unless your RFP stated otherwise, you can and should ask for clarification or negotiate any aspects of the proposal or bid that you don’t like. A telephone or in-person interview may be beneficial for both parties.
Your chosen vendor should get a contract (or service agreement, statement of work, or whatever variation is appropriate) and a purchase order number and/or deposit check as soon as possible.
Your non-selected vendors should be informed as soon as possible in a short, professional notification delivered in the same medium as that expected for the proposal. You do not need to offer an explanation at that time, although if the vendor later asks in an appropriate manner, you would be doing them a professional favor to tell them why they didn’t get the bid.
A good client–vendor relationship can last years and be a valuable resource for organizations. To be successful, you must know what you’re asking for and find the right vendor to provide it.