Request for proposal (RFP) is a document released by a buyer of a certain product or service outlining the requirements to receive a response from sellers. It is floated among the sellers of that product or service, requesting a commercial proposal of the required goods and services. It is very common in the B2B or B2G space. Initiating a purchase via an RFP is prevalent because of the detailed description of the purchase and transaction the buyer is looking for.

RFP in Procurement Process

In a procurement process, the buyer can select a set of sellers to whom the RFP document can be sent out. There are various formats of the RFP document available online as per different industries. Some common heads in the request for proposal document are product specifications, quantity, budget, timeline and evaluation criteria. It is important to note that the details required in the request for proposal document by the buyer vary across industries. It is best to check the industry standards in your region.

There are several templates for RFP in procurement for different industries available online, but you can definitely tweak them to suit your requirements. The details in the request for proposal are very important as it sets the stage for the entire procurement process. The better the RFP in procurement, the better the chance of getting proposals that are likely to close. That said, it is also common to modify RFP or share additional documents to further narrow down the procurement process. It is recommended to consider the timelines of the procurement cycle.

RFP in Procurement for Suppliers, Sellers and Resellers

An RFP in procurement is an essential tool. The suppliers or sellers have to respond to the RFP (Request for proposal) in the specified timeline. Before drafting a proposal as a response to the RFP, it is very important to review it several times with the concerned team. The proposal should meet all the requirements mentioned in the RFP.

The different types of request for proposals include open RFPs, closed RFPs, competitive RFPs, 2-step RFPs, and single source RFPs. As the names suggest, open RFPs are open to a wide range of vendors and are open to different solutions, closed RFPs are only open to a set of prequalified vendors, competitive RFPs are open to multiple vendors to compete on price and value and finally, 2-step RFPs are those which allows vendors to submit a high-level commercial proposal first and once selected they are invited to submit a detailed proposal.

Drafting an outstanding proposal is a craft in itself. One aspect of the request for proposal that should need special attention is the evaluation criteria specified by the buyer. The proposal should be on the same lines as the evaluation criteria. If there are any discrepancies in the details mentioned in the RFP and your product or conditions to supply, it is best to refer to the evaluation criteria to adjust your proposal in a way that meets those requirements first, which have higher weightage in the evaluation criteria.

The suppliers/ sellers have to find a balance between drafting an impressive proposal and delivering it on time. In competitive industries like IT services and Financial services, The response to requests for proposals is kind of like a pitch deck tailored to the requirement shared. It is highly recommended to include your experience of working with similar clients or providing similar services.

A supplier’s response to a “request for proposal” is a proposal document. It is drafted and shared by the supplier/seller. The common sections of a proposal include an executive summary, proposed solution/ product, timeline, price justification, deliverables and terms and conditions. The sections of the content might vary by industry and the specific RFP, but a few things that could really help in drafting a winning proposal are the 3Cs and 4Ps. The three Cs are an abbreviation for compliance, competence and comprehensive whereas the 4Ps are for problem, proposal, plan and progress. Keeping these larger themes in mind while drafting a proposal will help you achieve the desired outcomes.

RFP in Procurement for Buyers

In case of buyers, before drafting an RFP, a prior stage of project planning is a general practice. Although it differs from industry to industry and the kind of product or service you’re looking to procure. For example, an RFP for the procurement of batteries for remotes may not require a project planning stage, while the procurement of software, computers or furniture to revamp the office will likely need project planning.

In the project planning stage, the requirement is chalked out clearly covering its why, what, when, and how.

It starts with a challenge/ pain point or broad requirement. Once it is defined, its scope is decided. The proposed procurement has to closely align with the broader business strategy. A range of potential vendors is also mapped for the most optimum procurement.

A timeline of the procurement process is created. It is always recommended to have some buffer time between each stage. The decided details of the project are then curated and shared with all the internal stakeholders for review. The feedback from the internal stakeholders for scoring and weighing the evaluation criteria is essential. It is always recommended to have a final review with all the direct and indirect stakeholders before going to the RFP stage.

The project planning stage provides all the ingredients required in drafting an RFP. A request for proposal document is drafted which commonly has a statement of purpose, background information, scope of the requirement, budget, project timeline, terms and conditions, RFP timeline and evaluation criteria.

Navigating Through RFPs as a Buyer and a Seller

For sellers, going through RFPs to identify relevant opportunities is time-consuming and could be vulnerable to human errors, and in addition the proposal drafting stage requires maximum attention. That is where BidAssist comes in. It is an online tender aggregation platform that scans through all the government RFP and tenders and recommends only what is relevant to you so that you can focus on what’s more important.