Adrian Bewley's blog: Drafting a car hire RFP? Here are five things to consider
16 August 2017
In my 20 years at Enterprise I've seen vehicle rental change dramatically. I've also seen and responded to a lot of tenders for rental services, from both private and public sector fleets, and yet I'm often surprised by how little these have changed.
Increasingly, it seems organisations could use a helping hand if they want a tender to deliver the solutions they truly need. For example:
1. Understand what you need before you write the tender
Analyse your actual mobility requirements in detail. Understand you're buying a service and not just a commodity. Know where your offices and employees are, how and why drivers need to access the service and what business value they're creating. Is being on time business-critical?
Try to identify how much spend is domestic vs. international; which locations or departments are the most frequent users; whether you're delivering vehicles to a place of work or to the home; and who's making shorter journeys where a car club would be more cost-effective than either mileage reimbursement or daily rental.
Also, is mileage reimbursement being managed and does it sit outside of the main travel policy? If it's unmanaged, why? What can be done to mitigate risk across all factors, not just the obvious ones like the overall car hire spend.
If this data is hard to find, and it can be, ask the rental company for help or speak to grey fleet experts, either in HR or finance. Collaboration is key.
2. It's not just the daily hire rate
Many RFPs, often those led by procurement departments, focus almost exclusively on comparing suppliers' day rates.
Instead, compare the whole life cost and map out all the operational expenditures including rental days. Consider in-life costs like vehicle repairs, replacement vehicles and delivery & collection costs and times. If you need dozens of rentals in Blackpool, and the lowest-day-rate supplier's nearest branch is in Wigan, you'll end up spending a lot more money on hidden fuel costs for deliveries.
3. Make sure costs are transparent
Once you've begun to understand all the costs involved, ensure your supplier is completely transparent in how those costs are calculated and invoiced. Make sure your supplier has the capability to deliver the project on time and consider all the costs, should there be a delay. Ensure it can support your business at the front end and the back end.
4. Get suppliers involved before you issue the tender - and let them feedback on it
A good rental company will be able to advise and guide you on all aspects of business mobility, including strategic planning and travel policy enforcement. It can also advise you on what questions to ask in your RFP so you're getting the right level of service before, during and after each rental.
Create a balanced approach to grading price and service, as there's no point selecting the cheapest supplier if it isn't able to meet the business requirements.
5. Rental isn't just daily any more
Companies like Enterprise now offer a range of different options on flexible terms that may better suit your needs. Some are by the hour, some by the month, some more long term. Encourage tendering suppliers to advise on the best solution to meet your business needs. How important is flexibility to you?
Ideally, look for a partner that can help enforce a travel policy and help reduce risk while helping employees access transportation that suits their needs more strategically. Finding suppliers that mould around your particular requirements really does lower operational costs and unlock real value.
If you're planning to draft a rental tender, or if you're a smaller business keen to find the right mobility partner without a complex procurement process, bear these points in mind. It could save you a lot of money, and you won't have to bolt another, higher-cost supplier onto your contract because the low-cost one couldn't fulfil your needs.