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Our goal in employee benefits is to understand our clients’ exposure to risk and ensure no gaps exist, while covering their needs. Carriers usually look to cover pure risk (loss that either happens or doesn’t), however, this is the real world where we recognize that many forms of risk are speculative; meaning, risks tend to be more difficult to predict, but have a potential gain (e.g. gambling).

“Oftentimes, decisions we help our clients make feel like a gamble to them.”

Oftentimes, decisions we help our clients make feel like a gamble to them. To make decisions that impact their business easier, we often compile information in the form of two documents: a Request for Information (RFI) and a Request for Proposal (RFP). To get a handle on the differences between these two documents, let’s use the following scenario: a client is looking to move to a new benefits administration system.

Transitioning to a new system is a speculative risk for clients, and understandably so. It is a conscious choice that will hopefully result in a gain, but that’s not guaranteed. To make a more educated and comfortable decision, clients will often reference an RFI. This document is an effective way to compare different vendors. It allows vendors to broadly explain their offerings, which then gives the client an opportunity to have a productive conversation with Lockton about how each vendor meets, or doesn’t meet, the client’s needs. We request RFIs to be updated once per year, and reviewed and updated (if necessary) upon each client engagement to ensure the most up-to-date information is on hand. Some sample questions might include:

  • Company demographics
  • Length in the industry
  • Average client size
  • Approach to implementation
  • Data security requirements
  • Approach to service, etc.

Clients will review the RFI to determine if the vendor might be a potential fit for the desired services and meet the client’s minimum requirements. The next step is to issue an RFP to the narrowed list of vendors (we recommend four to six vendors participate in the RFP process). The RFP document is based upon the client’s unique requirements and it highlights specific pricing for in-scope services. The RFP is not a ready-made document; we work with each client to formulate questions unique to their requirements that were not addressed in the RFI, yet are imperative to the client’s decision. These questions are then sent to the vendors. Sample questions might include, “Do you offer a closed loop payroll reconciliation process?” or “Do you have any clients that use brand X for their HR system? If so, do you have an established interface? Will the client give you a reference?”

Generally speaking, an RFI is of greater length and asks specific questions, but is not unique to a particular client. RFPs ask for specific pricing for certain in-scope items, and ask pointed, detailed questions to help a client understand a particular functionality, offering or service.

We’d love to hear your experiences with RFIs and RFPs. Are both necessary?