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NYS Comptroller

THOMAS P. DiNAPOLI

The Academy for New York State's Local Officials

Cash Management: A Tutorial for Local Governments and School Districts

Module 3: Maximizing Interest Earnings

Elements of a Comprehensive RFP

What should be in your RFP document? Listed below are some suggestions for a comprehensive RFP:

  • Introduction: First, include background information on your municipality, such as size, budget, population, and taxpayer services. Second, tell potential bidders what you want to accomplish with the RFP. For example, some potential objectives of the bidding process can be to reduce operating costs, increase the funds available for investment, and increase the number of electronic transactions.
  • Minimum Proposal Requirements: The minimum proposal requirements may include items such as branch locations, ability to handle special conditions, and size. You need to decide what you want to include as minimum proposal requirements.
  • Description of Current System: This description, at minimum, should include current account and bank information, average daily balances, and the number and type of transactions processed. Include accurate estimates of the financial activity (transactions) going through your checking accounts such as the number of checks, deposits and wire transfers processed, etc. You can extract much of this information from your monthly analysis reports (if they are available) and tabulate it easily.
  • Description of Desired Services: These services could include depository, availability (cut-off) schedules, lockbox, wire transfers, controlled disbursement account, account reconciliation services, collateral requirements, etc. Ask questions requiring a written response, or use "fill in the blanks" type questions, and try to avoid the use of "yes" and "no" questions. Some typical questions that you may want to ask are: "Describe the method you use for compounding interest," "Describe the depository services you offer," and "How can your proposed services help increase the availability of collected funds?"
  • Proposal Guidelines: Tell the proposer the forms to be completed, when the proposals are due, the length of the contract for services, and any other terms and conditions that you require. Other terms could include requesting proposals on a direct fee and a compensating balance basis, compensating balance formulas, restrictions on bank location, and client references.

Once the RFP has been prepared and all the proposals have been received, the last step is to evaluate the proposals. Remember a few helpful hints in evaluating the proposals: make sure the format is followed and that responses are concise and well tailored to your needs, and review the client references and bank's Community Reinvestment Act ratings.

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