8/15/2017 Request for proposal - Wikipedia

Request for proposal

From Wikipedia, the free encyclopedia

A request for proposal (RFP) is a document that solicits proposal, 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.[1] It is
submitted early in the procurement cycle, either at the preliminary study, or procurement
stage.

An RFP is used where the request requires technical expertise, specialized capability, or
where the product or service being requested does not yet exist, and the proposal may
require research and development to create whatever is being requested.

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.[2]

Similar requests include a request for quotation (RFQ), whereby the customer 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.[3]

In principle, an RFP:

Informs suppliers that an organization is looking to procure and encourages them to

make their best effort.
Requires the company to specify what it proposes to purchase. If the requirements
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 organization can demonstrate impartiality - a crucial factor in public sector
procurements.

Contents

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1 Specifications
2 Other requests
3 See also
4 References

Specifications
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 (used on major
procurements of services, where the item has not previously been made or where the
requirement could be met by varying technical means), 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).

The ubiquitous availability of the Internet has made many government agencies turn either
to state-run or vendor operated websites which provide listings of RFPs as well as RFIs and
RFQs. Many allow vendors to sign up at no charge to receive e-mails of requests either
generally or for specific categories of product or service for which there is an interest. In
some cases, the entire process is done on-line with responses as scanned documents or PDF
files uploaded to the server; in other cases, or for legal reasons, a response must be sent in
hard copy form and/or on CD/DVD disc or flash drive by mail or delivery service.

In the militaries of many countries, an RFP is often raised to fulfill an Operational

Requirement (OR), after which the military procurement authority will normally issue a
detailed technical specification against which tenders (i.e., bids) will be made by potential
contractors. In the civilian use, an RFP is usually part of a complex sales process, also
known as enterprise sales.

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.

The bidders return a proposal by a set date and time. Late proposals may or may not be
considered, depending on the terms of the initial RFP. The proposals are used to evaluate
the suitability as a supplier, vendor, or institutional partner. Typically organizations follow a
detailed vendor screening process to short list the vendors who should be invited for further
rounds of negotiation. This screening process could either be vendor scoring models or
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internal discussions within the buyer organization. Discussions may be held on the
proposals (often to clarify technical capabilities or to note errors in a proposal or in many
cases to negotiate on the price). In most instances, only selected bidders may be invited to
participate in subsequent bids, or may be asked to submit their best technical and financial
proposal, commonly referred to as a Best and Final Offer (BAFO). Subsequent changes
can be referred to as the Best and Revised Final Offer (BARFO).

Once both the parties i.e. a buyer organization and seller organization agree on the technical
and commercial terms and conditions of the proposal, they could move on to next steps like
contract signing, statement of work which would formalize the purchase transactions.

Today, many organizations are becoming more collaborative in the development of RFPs;
this is especially true for universities and other major public entities making major
technology purchases. RFP-issuing groups ask for specific use cases, rather than providing a
list of features, and ensure they have the opportunity to include demonstrations, webinars
and meetings as part of the RFP process to ensure they have a strong understanding of all
competing products before making a purchase.[4]

Other requests
A Request for Association (RFA), also known as request for partnership or request
for alliance, is a proposal from one party to another for acting together (usually in
business) and sharing the benefits of this joint action.

A Request for Information (RFI) is a proposal requested from a potential seller or a

service provider to determine what products and services are potentially available in
the marketplace to meet a buyer's needs and to know the capability of a seller in terms
of offerings and strengths of the seller. RFIs are commonly used on major
procurements, where a requirement could potentially be met through several alternate
means. An RFI, however, is not an invitation to bid, is not binding on either the buyer
or sellers, and may or may not lead to an RFP or RFQ.

A Request for Quotation (RFQ) is used when discussions with bidders are not
required (mainly when the specifications of a product or service are already known)
and when price is the main or only factor in selecting the successful bidder. An RFQ
may also be used prior to issuing a full-blown RFP to determine general price ranges.
In this scenario, products, services or suppliers may be selected from the RFQ results
to bring in to further research in order to write a more fully fleshed out RFP.

A Request for Qualifications (RFQ) also known as Pre-Qualification

Questionnaire (PQQ) is a document often distributed before initiation of the RFP

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process. It is used to gather vendor information from multiple companies to generate a

pool of prospects. This eases the RFP review process by preemptively short-listing
candidates which meet the desired qualifications.

A Request for Solution (RFS) is similar to a RFP, but more open and general.[5]

A Request for Tender (RFT), also known as Invitation to Tender (ITT), is more
commonly used by governments.

See also
Call for bids
Contract A
E-tendering
ERFx
Funding Opportunity Announcement
Outsourcing
Proposal software
Qualifications-Based Selection
Reverse auction
Sources Sought
Statement of work
Strategic sourcing
Tendering

References
1. Blake, Gary & Bly, Robert W. (1993). The Elements of Technical Writing. New York:
Macmillan Publishers. p. 100. ISBN 0020130856.
2. "How Request for Proposal should be used in business &#124" (http://www.negotiatio
ns.com/articles/procurement-terms/). Negotiation Experts. Negotiations.com.
Retrieved 2013-05-16.
3. "What's the difference between an RFI, an RFP, and an RFQ?" (https://www2.humbold
t.edu/its/node/1633). Humboldt State University. Retrieved 2015-07-28.
4. http://www.evolllution.com/opinions/entering-tech-procurement-process-5-rfps/
5. Tonti, Jon (July 3, 2012). "Out with Request for Proposals and in With Request for
Solutions" (http://www.nearshoreamericas.com/outsourcing-request-for-proposals/).
Nearshore Americas. Retrieved 11 April 2017.

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