Ultimate Guide to the Procurement of Translation Services

If this is the first time you have to procure Translation Services, read on, and we will outline the process and all you need to know!

No time to read? Then download our suggested RFP questions right away.

What Is an RFI?

An RFI (Request for Information) asks potential Language Service Providers (LSP) for high-level information about their company. In this case, a localization RFI should cover:

• Overview of the company
• Financial standing
• Services provided
• Languages covered
• Experience in a specific industry

The purpose is to collect data on companies invited to the RFI and compare them to identify the best fit for you.

Typically, the RFI originates from the procurement department within an organization. It has many stakeholders and different objectives. For instance:

• Top management might want less human involvement in processes
• Finance might be looking for a reduction in spend
• IT might look for better integration among all systems
• Localization might want to implement the latest AI technologies

Each company has different reasons for launching an RFI.

Here are a few:

• Increase/decrease the number of LSPs in the panel
• New languages are required for translation
• New services are requested from internal teams

Once procurement has reviewed all responses, they compile a list of pre-selected LSPs that meet their criteria and invite them to an RFP. 

What Is an RFP?

An RFP (Request for Proposal) is the next step in the bidding process. The company's procurement department sends it to the pre-selected (RFI) potential suppliers. The purpose is to procure a service, in this case, a translation RFP is to buy translation and localization services. LSPs are asked to submit a business proposal in response.

There are many reasons to launch an RFP, as each company faces different challenges, from reducing spending to centralizing operations.

We believe that a good RFP should have 3 main ingredients:

1. It should explain the objectives of the company issuing the RFP.

For instance, it should state that the purpose of the RFP is to:

• Reduce the current spend on translation
• Increase the number of LSPs in the panel
• Benchmark paid prices with industry standards
• Centralize localization at HQ
• Integrate CMS & TMS across multiple locations
• Introduce AI in the translation process
• Increase the quality of translated products

2. It should specify the minimum requirements for an LSP to qualify.

The LSP can decide whether they are a good fit before responding to an RFP.

• $ XX M revenue
• Locations in the same cities as the company
• ISO certifications
• Proven experience in the same industry
• X amount of translators per language
• Provide specific services (localization, terminology, machine translation)
• Language combinations
• File formats they can handle
• Integration with current CMS/TMS

3. It should define the criteria for the selection of LSPs.

The criteria could be any (or all) of the following:

• Price
  Ability to reduce cost over time with new Technologies
  Added Value to the company (services, technology, etc.)
• Quality
  QA steps in the localization process
  ISO certifications (ISO 9001, ISO 17100, and ISO 18587)
• Turnaround
  Ability to deliver x millions of words per year
  24 x 7 service 
• Innovation
  A constant search for the best tools and technology in the industry
  Capability to apply the tools and technology to your own localization process  

What Is an e-Auction? 

This step occurs only after the RFP responses from the LSPs are carefully reviewed and a handful of LSPs that meet the criteria, are selected to participate in an e-Auction. An e-Auction is also known as a reverse auction. Its aim is to get the best market price for the company among the invited LSP. Only very large companies with millions in annual translation spend embark on an e-Auction. 

Typically, an e-Auction is:

• By invitation only
• On a fixed date
• With a maximum duration allowed
• Online via an e-auction tool
• A pre-defined set of rules
• Fixed currency

What Is an MSA? 

If the pricing submitted during the e-Auction is acceptable to the company, an in-person meeting is held to discuss a draft MSA (Master Service Agreement). An MSA is simply a contract between a company and its LSP.

The MSA:

• Defines the terms of the relationship
• Reflects the pricing agreed for the services
• Specifies the SLA (Service Level Agreements)
• Explains the discounts available to the company
• States the duration of the contract, e.g., 1 to 3 years (usually renewable)
• Defines the terms for larger projects SOW (scope of work)
• Sets responsibilities for the LSP for each assignment
• Includes the escalation point of contacts

If you need help writing your RFP questions, click here to download our free guide!

Interested in learning even more?

Read our blog article about 6 Do's and Don'ts for Writing a Localization RFP.