REQUEST FOR PROPOSAL (RFP)

Companies may solicit proposals from other companies through RFPs. RFP is a type of bidding solicitation in which a company or organisation announces that funding is available for a particular project or program, and companies can place bids for the project’s completion. In other words, RFP is a solicitation, often made through a bidding process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals (Blake & Bly, 1993). This happens whenever a company requires a professional service; decisions about what service provider or vendor to use are based on proposals, written summaries of how the provider or vendor intends to meet the needs of the company.

The RFP specifies what the customer is looking for and establishes evaluation criteria for assessing proposals. In this regard, RFP explicitly outlines the bidding process and contract terms, and provides guidance on how the bid should be formatted and presented. A RFP is typically open to a wide range of bidders, creating open competition between companies looking for work. 

A typical RFP outlines the company’s need for a product or service and provides an outline for prospective vendors or service providers to follow in the development of a proposal. In addition, RFP would generally includes background on the issuing organisation and its lines of business, a set of specifications that describe the sought-after solution, and evaluation criteria that disclose how proposals will be graded. RFPs may also include a statement of work, which describes the tasks to be performed by the winning bidder and a timeline for providing deliverables. The skill with which a customer creates an RFP could dictate the success or failure of the bidding firm. If the specified requirements are too vague, the bidder may miss the mark when it designs and implements the solution. Overly detailed and restrictive requirements could limit the bidders’ creativity and stifle innovation.

RFPs may be made to some selective list of companies to whom the needing company mighgt have had previous business dealings or advertisement made in professional journals and newspapers. RFPs usually contain details about the project, budget information, deadlines and the criteria that will be used to select the vendor or service provider. It is submitted early in the procurement cycle, either at the preliminary stage or at procurement stage.

The RFP presents preliminary requirements for the commodity or service, and may dictate to varying degrees the exact structure and format of the supplier’s response. Effective RFPs typically reflect the strategy and short/long-term business objectives, providing detailed insight upon which suppliers will be able to offer a matching perspective.

An RFP typically involves more than a request for the price. Other requested information may include basic corporate information and history, financial information (can the company deliver without risk of bankruptcy), technical capability, product information such as stock availability and estimated completion period, and customer references that can be checked to determine a company’s suitability (including educational and military background of its employees on the project — college graduates and those with advanced college degrees may add “value” from the bidder).

RFPs often include specifications of the item, project or service for which a proposal is requested. The more detailed the specifications, the better the chances that the proposal provided will be accurate. Generally RFPs are sent to an approved supplier or vendor list. Similar requests include a request for quotation (RFQ), whereby the vendor may simply be looking for a price quote, and a request for information (RFI), where the customer needs more information from vendors before submitting an RFP. An RFI is typically followed by an RFP or RFQ. In principle, an RFP:

  • informs suppliers that an organisation is looking toprocure and encourages them to make their best effort.
  • requires the company to specify what it proposes to purchase. If therequirements analysis has been prepared properly, it can be incorporated quite easily into the Request document.
  • alerts suppliers that the selection process is competitive.
  • allows for wide distribution and response.
  • ensures that suppliers respond factually to the identified requirements.
  • is generally expected to follow a structured evaluation and selection procedure, so that an organisation can demonstrate impartiality – a crucial factor in public sector procurements.

Writing a Request for Proposal

Definition of a Request for Proposal: A request for proposal (RFP) is basically a publication of detailed requirements by a prospective buyer in order to receive vendor offerings. Usually dedicated to software evaluation, comparison, and selection, a request for proposal may be issued to select any kind of products and services. RFP publication is an efficient tool to gather solution capabilities, which are then put into a decision matrix allowing the selection of the solution that best fits the requirements.

How to write a professional RFP

Information Gathering

It is highly recommended that you to read the suggestions below in order to write a proper and successful RFP.

1.     Seems obvious but use a formal letterhead and do not handwrite your RFP. Use templates and samples provided in your FREE RFP Toolkit to create your own professional RFP document. Indeed, using a template and sample of an RFP will save you time.

2.     Identify all the key common sections of an RFP you should include by simply answering each and any of the questions Why? Who? What? How? and When? as shown below:

a)     WHY?
Why does your organisation need to buy a new solution?
Answering this question allows you to create the section called Statement of Purpose.

b)     WHO?
Provide a brief description of your organisation.
This information will become the Background information.

c)     WHAT?
What is the nature of your project?
What are the needs?
What are the expected outcomes?
Answering these questions allows you to complete the following sections:

o   Scope of Work

o   Outcome and Performance Standards

o   Deliverables

d)     HOW?
What is the contract?
What kind of information and documents do you expect to receive from providers?
How will proposals be evaluated and the best matching solution selected?
This information will be used for the sections:

o    Term of Contract

o    Payments, Incentives, and Penalties

o    Contractual Terms and Conditions

o    Requirements for Proposal Preparation

o    Evaluation and Award Process

e)     WHEN?
When to submit questions, proposal?
When the decision will be taken?
What is the whole selection process timeframe?
Who are the people responsible for evaluating proposals? For taking the final decision?
Answering these questions allows you to populate both sections Process Schedule, and Points of contact for future correspondence.

Common Sections of an RFP

By answering the questions above, you were able to gather relevant information that will help you detail the common sections of an RFP. Here is a brief description for each and any of the common sections of your RFP:

•    Statement of Purpose: Describe the extent of products and services your organisation is looking for, as well as, the overall objectives of the contract.

•    Background Information: Present a brief overview of your organisation and its operations, using statistics, customer demographics, and psychographics. State your strengths and weaknesses honestly. Don’t forget to include comprehensive information on the people who will handle future correspondence.

•    Scope of Work: Enumerate the specific duties to be performed by the provider and the expected outcomes. Include a detailed listing of responsibilities, particularly when sub-contractors are involved.

•    Outcome and Performance Standards: Specify the outcome targets, minimal performance standards expected from the contractor, and methods for monitoring performance and process for implementing corrective actions.

•    Deliverables: Provide a list of all products, reports, and plans that will be delivered to your organisation and propose a delivery schedule.

•    Term of Contract: Specify length, start date and end date of the contract, and the options for renewal.

•    Payments, Incentives, and Penalties: List all the terms of payment for adequate performance. Highlight the basis for incentives for superior performance and penalties for inadequate performance or lack of compliance.

•    Contractual Terms and Conditions: Attach standard contracting forms, certifications, and assurances. You may include requirements specific to this particular contract.

•    Requirements for Proposal Preparation: A consistent structure in terms of content, information, and documents types simplifies things for the people evaluating the proposals. Therefore, you should request a particular structure for the proposal and provide an exhaustive list of documents you want to receive.

•    Evaluation and Award Process: Lay down the procedures and criteria used for evaluating proposals and for making the final contract award.

•    Process Schedule: Clearly and concisely present the timeline for the steps leading to the final decision, such as the dates for submitting the letter of intent, sending questions, attending the pre-proposal conference, submitting the proposal, etc.

 

Contacts: Include a complete list of people to contact for information on the RFP, or with any other questions. Incorporate their name, title, responsibilities, and the various ways of contacting them into this list. Do not forget to send your RFP via certified mail.


Since things sometimes get a little more complicated than usual, remember to consult a Lawyer for further information before doing anything.

References

Blake, G. &  Bly, R. W. (1993). The elements of technical writing. New York: Macmillan Publishers, p.100. 

Davies, F. (2016). What Is RFP? http://www.ehow.com/facts_5625331_rfp_.html

Humboldt State University.  What’s the difference between an RFI, an RFP, and an RFQ?.. Retrieved 2015-07-28.

Investopedia (2016). What is a ‘Request For Proposal – RFP’. http://www.investopedia.com/terms/r/request-for-proposal.asp

Negotiations.com.  How Request for Proposal should be used in business | Negotiation Experts. Negotiations.com. Retrieved 2013-05-16.

Technology Evaluation Centers (2016).  Writing an RFP. http://www.rfp-templates.com/Free-RFP-Templates/RFP-Template

Techtarget (2015). Request for proposal (RFP). http://searchitchannel.techtarget.com/ definition/request-for-proposal

Wikipedia (2016). Request for proposal. https://en.wikipedia.org/wiki/Request_for_proposal

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