An RFP (Request for Proposal) can be issued by a company that’s choosing a service provider or vendor to work with. It’s a document that outlines project details and specifics and asks potential partners to return with a bid for the work. The company accepts multiple proposals and compares them to determine the best choice.
If you have been assigned the task for creating an RFP but don’t know what it is or where to even begin, we’ve made a guide to help you out. RFP is what can help you get the job done right when you have a large and complex project that requires some outsourcing.
The company requesting the work must draft an RFP before potential bidders can send their proposals. It gives them a better idea of what the company is seeking. Bidders send an offer that usually includes an action plan, a timeline, background information, and how much they expect everything to cost.
When a company receives all the bids, they compare all of them and determine which one is the best fit for the job. With multiple submissions on your desk, you will want to narrow the choice down to your top five or ten favorites to consider.
You can request one final offer from your top vendors to make sure that you’re getting the right vendor at the right price. All of this can save you much time, money, and any headaches further along the road.
Why Issue an RFP?
Looking for the right vendor on your own takes a lot of time. You’ll need to search for vendors, contact them, explain the job specific to each one of them, and keep repeating it for every promising referral or vendor along the road. By issuing an RFP, you’ll make sure that your potential vendors know all the details before reaching out to you with their best plan of action. Just outline everything once and let them come to you.
Writing an RFP
The basic structure of an RFP goes like this:
- Project overview – is an introduction to the project, so the vendors will know what it’s all about and whether it’s worth bidding before going into details.
- Company background – is a short history of your company, what you do, what is your mission, and who you are trying to serve (your target market).
- Project goals – is where to explain what you want to accomplish with the project.
- Project scope – is an essential element of every RFP because it contains the details of the project. You want it to be concise and detailed because a vague project scope won’t bring in the best vendors.
- Target deliverable schedule – is where you should include a target deliverable schedule in your RFP so potential partners can gauge if they have the bandwidth and resources to finish the job on time.
- Potential roadblocks – Every project has some potential issues, so don’t try to hide them but present them in the RFP. The vendor would like to know these.
- Budget constraints – Be upfront with your budget to eliminate disappointments.
- What you are looking for in a partner – Explain this to eliminate surprises further. Outline what matters the most to you and your project and how you’ll evaluate their proposals.
Don’t Confuse RFP with RFQ
RFQ stands for Request for Quotation. It’s different than an RFP in a sense that it’s just the quote. When companies want to compare services based only on the price, they issue an RFQ. RFP is much broader as it contains other specifics besides the price quote.
If you need help planning your next project, please contact one the experts at Exceedion.