How to run a request for proposals

A request for proposals does not need to be a procurement exercise. It can be a one page brief, the same questions to three or four advisers, written answers on the same claim figure, and a decision made on paper rather than on a pitch. Done that way it takes a few weeks and produces a letter you understand. This guide sets out the steps. It does not recommend any adviser, it does not rank fee models, and it is written so that every candidate gets the same chance.

Step 1: decide whether you need one

A formal process earns its time when the claim is large enough that the fee matters, when you have more than two serious candidates, when more than one person in the business will have a view, or when you want a record of why you chose as you did. For a small first claim with one obvious candidate, the how to choose an adviser guide is enough on its own.

If you run a process, run it properly: the same information, the same questions and the same deadline for everyone. A process that favours one candidate wastes the others' time and tells you less than you think.

• A claim large enough, or candidates enough, to justify the time
• Someone to own the process and keep the record
• Three to five weeks available before you need to sign

Step 2: write a one page brief

The brief is the same for every candidate and says what you want. Describe the business in a few lines: what it does, how many people, where it files. Describe the work you want done: a full claim, a review of your draft, the technical case only, or help with a review. State the accounting period, the filing deadline and the timetable for the process. Give your expected claim figure and half of it, and ask for every fee to be worked on both. List the information you will provide to every candidate on request, such as one page project descriptions, and say that you will provide the same to all.

Say what you will not do: you will not share one candidate's proposal with another, and you will not decide on a verbal offer. Say how you will decide, in general terms, so that candidates can address it.

• Business, work wanted, period, deadline and timetable
• Expected claim figure and half of it
• The information pack, the same for everyone
• How you will decide, in general terms

Step 3: choose who to invite

Three to five candidates is enough. Draw them from more than one source: your accountant's suggestions, businesses like yours, professional bodies, your own search. For each, check what can be checked before you invite them: registration or professional body membership where your country has one, named people and their roles, and whether anyone was paid to introduce them.1Source 1How to check an adviser's registration or credentials: IRS, "Understanding tax return preparer credentials and qualifications" and "PTIN requirements for tax return preparers" (United States); HMRC, "Tax advisers to register with HMRC and meet minimum standards" and manual MTAR10100 (United Kingdom); Revenue, Tax and Duty Manual Part 37-00-04b, which says Revenue does not approve tax agents or advisers (Ireland); CRA, "Using a professional tax preparer" (Canada); Tax Agent Services Act 2009, Part 3, the code of conduct for registered tax agents administered by the Tax Practitioners Board, and the Board's complaints form (Australia); Inland Revenue, "Tax agents" and "Tax agent status" (New Zealand); IRAS, "IRAS-Tax Agent relationship" (Singapore). More detail on your country page. Invite them with the brief and a date for written answers.

Tell each candidate who else is in the process only if you would be content for all of them to know; the fairest course is to tell none. An introducer who is paid by one candidate should not be running the process.

• Three to five candidates from more than one source
• Registration or body checked where one exists
• Named people confirmed before the invitation
• Introductions and any payment for them noted

Step 4: send the questions and the information

The twenty questions are the questionnaire; send them to every candidate with the brief and ask for written answers by the date. Add any questions specific to your business, such as experience in your field. Send the same information pack to each candidate when they ask for it, and keep a note of what was sent to whom. If one candidate asks a good question, give the answer to all.

Ask for the proposed engagement letter, including any standard terms, with the answers. A proposal without the letter is half a proposal, and the letter is what you will be comparing in the end.

• The twenty questions sent to every candidate, with the brief
• The same information pack to each, logged
• Answers to one candidate's questions shared with all
• Engagement letter and standard terms requested with the answers

Step 5: compare the written answers on the same basis

Put every proposal on your expected claim and on half of it, add the extras, and test the bad outcomes, using the how to compare proposals guide. Then compare the non-fee terms: full claim before filing, named on the form where it asks, records returned without charge, notice period and renewal, exit fee, liability cap. Give each proposal a one page summary in the same format.

Decide on paper before you meet anyone. Score the summaries against the criteria you set in the brief, with more than one person scoring if more than one will live with the result. Keep the scoring private: it is your decision record, not a league table, and this site does not rank advisers. Treat the fee models fairly as you score. A percentage fee, a fixed fee, a cap and an hourly rate each suit different claims, and the question is which suits yours, not which is cheapest in the abstract.

• Every proposal costed on both claim figures with extras
• The two bad outcomes costed for each
• Non-fee terms compared side by side
• One page summary per proposal, scored against the brief

Step 6: meet the shortlist and check references

Meet the two or three candidates who scored best, with your technical lead in the room, using the preparing for adviser meetings guide. Ask the questions that are better asked in person: how they decide what qualifies, who will do the technical work, what they have seen go wrong. Then call references for each, including at least one whose claim was reviewed, using the reference check guide.

Meetings and references can move a candidate up or down. Note why, in the record, so that the decision can be explained later.

• Two or three shortlisted candidates met, technical lead present
• References called for each, at least one reviewed
• Changes to the scoring noted with reasons

Step 7: decide, negotiate and tell the others

Choose, write down why, and then negotiate the terms that matter with the chosen adviser using the how to negotiate fees guide. Get the agreed terms into the engagement letter, and have a lawyer in your country review it before you sign. Tell the other candidates promptly and politely; a line of thanks is enough, and you may want to ask them again in a future year. Keep the brief, the answers, the summaries and the scoring together. They are the record of a fair process, and the starting point for the next one.

• Decision and reasons written down
• Terms negotiated with the chosen adviser and written into the letter
• A lawyer has reviewed the letter
• The others told; the record kept

The brief, in outline

A brief that fits on one page is easier for candidates to answer and easier for you to compare against. This is the outline this guide assumes; adapt it to your business.

1. About us: what the business does, how many people, where it files, whether it has claimed before.
2. What we want: the work (full claim, review of our draft, technical case only, help with a review), the accounting period and the filing deadline.
3. Our figures: the expected claim and half of it; every fee to be worked on both, with the base named and any cap, minimum or extras stated.
4. What we will provide: the information pack, the same to every candidate, on request.
5. What we ask you to send: written answers to the twenty questions, a worked example on both figures, the proposed engagement letter with any standard terms, and the names and roles of the people who would do the work.
6. Timetable: the date for written answers, the dates for meetings with a shortlist, and the date we expect to decide.
7. How we will decide: on the written answers and the letter first, then meetings and references; no decision on a verbal offer; no candidate's proposal shared with another.

Keep the tone plain and keep the brief short. A candidate who reads it should know exactly what to send and when, and should be able to see that every other candidate was asked for the same.

Read next

• How to choose an R&D tax adviser and how to compare proposals
• Questions to ask and the scripts
• Case study: two proposals, one claim

Sources

1. How to check an adviser's registration or credentials: IRS, "Understanding tax return preparer credentials and qualifications" and "PTIN requirements for tax return preparers" (United States); HMRC, "Tax advisers to register with HMRC and meet minimum standards" and manual MTAR10100 (United Kingdom); Revenue, Tax and Duty Manual Part 37-00-04b, which says Revenue does not approve tax agents or advisers (Ireland); CRA, "Using a professional tax preparer" (Canada); Tax Agent Services Act 2009, Part 3, the code of conduct for registered tax agents administered by the Tax Practitioners Board, and the Board's complaints form (Australia); Inland Revenue, "Tax agents" and "Tax agent status" (New Zealand); IRAS, "IRAS-Tax Agent relationship" (Singapore). More detail on your country page.  Back