Op-Ed: Exhaustive TMC RFPs Prove Counterproductive

During the past two years, in representing several global clients in contracting with travel management companies, there has been a commonality of experience: In each instance, the client issued an exhaustive request-for-proposals document, the responses from the travel management company bidders were often canned or excerpts from marketing materials, the contract negotiation process was protracted and contentious, and the client was often dissatisfied with the service provided. What went wrong?

Corporate travel managers and procurement professionals who support travel acknowledge—and go to great lengths to ensure—that the travel management services business is a low-margin business. In light of this reality, can a TMC, responding to multiple RFPs, be expected to provide personalized responses to each of the 100-plus questions that often appear in a comprehensive RFP? The answer is obvious and leads ineluctably to the conclusion that RFP documents should be crafted with care and an appreciation that less can be more.

Cost and quality of service are typically paramount concerns in procuring a TMC. RFP questions should focus first and foremost on the agents providing the services. How many travel counselors does the TMC currently have on payroll who can serve the corporation's needs at the commencement of the contract? How many years' experience does each agent have working on a similar corporate account? In this regard, please note that a question seeking the average level of experience will result in answers that obfuscate rather than inform: One agent with 20 years' experience, coupled with four agents each with six months' experience, yields an average experience level of more than four years and all but guarantees a substandard level of service. Also relevant is the type of training the travel management company provides agents, ensuring they will be fully familiar with the corporation's preferred carrier agreements, travel policies and travel patterns. Is a collaborative training program, designed in part by the customer's corporate travel managers, something the TMC will consider?

A concomitant of years of experience is higher pay. That may be fine, so long as the corporation is provided with individual profiles (which need not include names or other personal information) showing the pedigree and compensation of each agent likely to serve on the account. We have witnessed on more than one occasion promises of best-in-class service, together with direct costs or transaction fees that contemplate payment of entry-level wages to travel counselors. The two are mutually exclusive.

As answers to the questions regarding travel counselors and costs may not yield a satisfactory result, the RFP should explore recruiting practices of the TMC, the status of labor markets in the regions in which call centers are contemplated, and suggestions about alternative venues for call centers, which are likely to produce the greatest pool of talent at the most reasonable cost.

Narrow the focus of the RFP to its essential elements. Procurement practices generally, internal controls, reference checking, corporate social responsibility, protection of trade secrets, network and data security and assurance of anti-discrimination practices by vendors are among the concerns that require posing questions to prospective TMCs. We recommend:

• Sensible placement of those questions within the RFP document or, perhaps, within an RFI (request for information) that precedes the RFP

• That key questions about the travel counselors' experience and cost appear front and center, posed so as to elicit meaningful responses

• All questions likely to yield inconsequential information to the decision making process are eliminated (e.g., a question asking a TMC to specify whether an alliance partner in a remote country in which 30 bookings are made annually is owned, controlled by or only loosely affiliated with the TMC)

Streamlining the RFP process so that the bulk of the information generated is germane to the parties' prospective relationship helps ensure that RFP-critical information finds its way into the business travel services agreement.