What's the Budget?

Back in the dim, bygone days when I was employed by a not-for-profit organization, I used to sneer at consultants who responded to our Requests for Proposals with questions about how much we had budgeted for a particular contract. I knew exactly what those scoundrels were doing. If I told them we had $200,000, well, by gum, they'd give us a proposal for exactly that amount, or a few cents less. Being a shrewd and parsimonious fellow, I assumed that if I made them guess how much we could afford for the work, they'd give us a lower quote.

Around the same time my wife and I were looking to buy our first house. The first question the realtor asked me was: "How much do you want to spend?" And I told her, of course, immediately. After all, why waste my time, and hers, forcing her to guess what it was I wanted and how much I had to spend?

Do you see a bit of a contradiction there?


Any consultant worth his/her salt can approach an assignment in many different ways. Let's say you want to evaluate the success of particular training program you've been running.  At the simplest, cheapest level, you can have participants fill out reaction sheets at the end of the course and tally them up. You can augment that data by adding a survey of former students. Even richer data can be found by tracking the employment history of graduates, by interviewing industry professionals about your training program, by observing the program during delivery, by measuring behavioural outcomes - there are literally dozens of ways to evaluate your program. The choice of methodology depends on many factors - but the biggest single factor is cost.

A $5,000 budget will purchase a certain amount of consulting time, yield results, and allow you to reach some conclusions. A $50,000 budget will provide more time, more inputs, and more reliable results. Both projects will have value: but will involve radically different approaches. By telling your consultants right in the RFP how much you propose to spend on a project, you're telling them exactly what scope and scale of research you're expecting.

Here are five reasons you should include the budget in your RFPs.

a) To save time - yours, and the consultants'. If your budget for a project is $25,000 and a consulting firm spends a week preparing a proposal for a $100,000 process, you've wasted hours of your time, and theirs.

b) So that you can compare apples to apples. By including your maximum project cost in an RFP, you're enabling consultants to tell you what their firm can do with a specific budget. It makes the comparison and rating of competing proposals much easier.

c) To clarify your own thinking about the project. Determining the maximum cost of a project beforehand is not only good management: it also ensures that your organization has thought through its goals for the process, and assigned a value to it.

d) To set the bar. The cost of a project sends a message to potential bidders about the level of expertise and effort you expect from proponents.

e) To ensure organizational commitment. Many great ideas or responses to urgent needs have failed to make it past the RFP stage because of the familiar refrain "that's way more than we were prepared to spend! Cancel it!" The expertise you are seeking will come in a consulting firm's methodology - not in their ability to guess at your budget.