Determine User Requirements - I/O, Deliverables, and workflow

The Project Bidding Process

A potential customer may begin the negotiating process by making the initial contact with SI in the form of a Request for Information. In a request of this nature, the potential client is primarily testing the market place to see which system integration companies are willing and able to bid on his project. Generally, during this stage of dialogue, detail is unimportant. The system is described in broad terms of technology and goals. This is usually handled by outside sales and a Proposal Manager

Responses to information requests are typically fielded by Marketing. The official response will depend on the outcome of an analysis to determine if the project fits SI’s business profile. If it does, a very high level solution may be proposed. Budgets and costs can be discussed at this stage, but only in broad terms.

If the customer likes the information he receives from SI, he will usually respond with a detailed request for proposal.

The Request For Proposal (RFP) or Request For Quotation (RFQ) is typically a detailed document outlining the potential client’s production requirements, technical specifications (usually centered around a nucleus technology), system description, equipment list, time frame, and other parameters. Such documents are usually sent to multiple system integration companies for comparison bidding. The breadth and depth of an RFP response is completely dependent on the conditions set forth in the request.

The Preliminary Labor and Materials Estimate should be generated. It contains cost estimates for most everything except the devices in the equipment list. It covers such things as labor, cables, connectors, custom fabrication items, and extraordinary installation expenses (like renting special equipment). Expenses such as lodging, travel, and per diem are also estimated.

A Software Functionality Document is an optional proposal section required only if custom software is a major deliverable. More on that in a bit.

A Preliminary Project Schedule might be required at this time, and it is a subset of the Scope of Work section of a proposal.

Scope of Work

The Scope of Work will be looked at in the next section.

System Proposal

The System Proposal is submitted to the potential client with the assumption that some fine tuning will probably be needed. The client is given a specified period of time to consider the proposal. If the client decides to continue negotiations, they will most likely make changes to the proposal and return it (signed or unsigned) for a second round of modifications and negotiations.

Depending on the client's modifications to the proposal, the affected sections will be reworked and the full range of impacts reevaluated.

Marketing and Sales will determine if the revised system package still meets a reasonable and justifiable profit margin or strategy goal. Necessary adjustments may then be made to the system/equipment pricing to align client and the SI goals.

The System Sale Agreement is drafted by Marketing once all the details have been revised, analyzed, and approved by upper management. It is a legal binding contract and as such, it takes about a month to prepare. The agreement reiterates all the content of the proposal (modified per negotiations) in exacting detail plus much legalese regarding terms and conditions.

A Letter of Intent is an interim expediting step that is used only in special circumstances. Its use may be motivated by several factors. One scenario might be; the proposal was adequate for the client to determine that your SI will be awarded the contract, but due to time limitations they need work to begin before a formal System Sale Agreement can be finalized.

The Letter of Intent and subsequent Authorization to Proceed obligates the client to pay the SI for services up to an agreed specified dollar amount. By signing this letter, the client and SI agree to proceed with work on the system without a signed System Sale Agreement. When the cost of the work in process reaches the amount specified in the agreement, a Stop Work Order is usually issued unless a signed System Sale Agreement has been received.

An Authorization to Proceed may also be issued without a Letter of Intent if the contract negotiations are going well and are in the final stages, but time constraints require project work to begin immediately.

The Authorization to Proceed is filled out by the project manager and submitted to upper management for approval. The dollar amount involved determines how far up the chain of command the request must travel.

Additional limitations may be placed on the Authorization to Proceed. For example, it may limit equipment purchases or specify that no equipment will be purchased (labor only) until a signed System Sale Agreement is received.

System Sale Agreement

The signed System Sale Agreement is a major milestone. It is in itself authority to proceed granted by the customer. Though not depicted in the flow chart, customers may red-line the agreement and/or request changes in any of its sub-sections. Sony Systems Integration will review any changes to the agreement before proceeding with the project or moving beyond any limits stipulated in an Authorization to Proceed.

The System Sale Agreement usually has three sections of interest to Engineers: the Equipment List, the Scope of Work, and Software Description of Services.

This is usually the final check and margin analysis the SI performs prior to signing the contract. The Master Equipment List and all revisions are carefully re-checked for completeness. Impacts resulting from final round client changes are incorporated into the evaluation. If the project still makes good business sense, SI signs the contract and the project proceeds.

SI's have withdrawn proposals at this stage of negotiations because the business evolved into an unattractive situation.

Create "Program Document" (Optional)

This document is occasionally part of the proposal and contract generated by Marketing. Its content includes architectural information such as: How many rooms?; How many people in each room?; What type of lighting, flooring, acoustical walls, etc.?; What type of equipment is in the room?, etc.

The Program Document must be sent to the client for their comment and approval. It is important that the client sign-off this document before design is started by Engineering. Sample program documents from past projects can be found in the Subject File cabinets under the heading, “Program Documents”.

Create "Software Functionality Document" (Optional)

If custom software is contractually required, a Software Functionality document may need to be created. It should describe the functional details of the custom software, (e.g., Custom software may be required to operate certain pieces of the client’s equipment.) If not in the contract, this document can still be created to clarify a software function.