Why would you ever want to develop an RFP with the intent of only sending it to one vendor!?

I've actually created entire RFPs and associated events, sending as sending out RFP issuance notices and conducting a proposal clarification session, when only one vendor was involved.  Am I off my rocker?  Quite the opposite, I'm trying to create what I call the illusion of competition.

Most procurement pros groan when a customer comes to them and says that there's only one vendor in the universe that can provide what that customer needs.  Talk about a bad deal headed your way...  At first, you might try to convince your customer that other vendors really do exist and you might even get the customer to consider the many other vendors that really do exist.  But, every now and then, you have a customer that is so stubborn or the political situation is such that you have to deal with one vendor.  Sometimes, if the "one and only" vendor doesn't have its claws into your customer too much, you can actually create the mystical illusion of competition through an RFP process.  And that's what I do whenever this type of situation pops up.  Fortunately, it's not frequently.

Not so long ago, I had a situation where I couldn't convince my internal customer that there was more than one vendor and the customer was high up enough in the organization to get a single-source deal approved without much trouble.  The deal involved software in excess of a few hundred thousand dollars--which was based on "preliminary" pricing from the vendor that it didn't want to budge on.  We also got a copy of their software license contract template that the vendor demanded we use--it was atrocious.  After some cajoling, I was able to convince my customer (since the deal was going to hit his budget) to take the time and effort to do an RFP, even for one vendor, because I thought the pricing wasn't aggressive enough and because I didn't want to get locked into a weak contract.
 
Convincing the internal customer to do a single-source RFP is one thing.  The other thing you need to ensure is that your customer can maintain the illusion of competition that you're trying to create.  In my example, I had the customer's buy-in and the customer was seasoned and savvy enough to follow along.  So, his staff and my staff ended up developing the requirements for the RFP.  The great thing was that, during the process of  having to put mind to paper, the customer had a better understanding of what they were really looking for.  That alone was worth the exercise.

Once the requirements were developed and refined, we drafted the RFP (using our master template) with a timetable, the requirements, evaluation criteria, proposal procedures, and a bidder proposal clarification session.  A cover e-mail was drafted and sent out with the RFP attached.  (Tip: I always send out RFPs (and RFIs) electronically via a cover e-mail that is addressed to myself and the prospective bidders are BCCed.  It's a great time saver, and vendors realize (or think) via the generic wording of the cover e-mail that there are definitely other bidders involved.)

As required by the RFP process, the one and only bidder duly provided an intent to bid.  Once their bid was in, the vendor was asked to conduct a proposal presentation to the "selection committeee" for the RFP.  Following a period of time of week or so, we then notified the vendor (via a generic e-mail) that they had been selected as one of the finalists.  We then sent out another generic e-mail asking the "finalists" to provide a best and final offer.  After receiving a revised offer, we continued negotiating the software license with the vendor, reminding the vendor that they need to deal favorably with us on the sofware license (or possibly face "losing" the business).  When we got everything exactly how we wanted, we then notified the vendor that they had been awarded the contract.  The vendor was very happy, my customer was very happy, and I was very happy.  It took two months and some investment of our time, but we ended up saving over $200K and had a very favorable contract.

So, when you're faced with a similar situation, instead of just "taking it," try a single source RFP process.  It sounds a little strange and takes some of your time, but it really works.