Have you been tasked with the job of creating a request for proposal, or an RFP? What is an RFP? Here’s how to understand the difference: While you’re technically receiving a quote in an RFP, you’re also getting information like the action plan, timeline of completion, deliverable schedule, and the list of services provided as well. The RFP Process Explained Before potential bidders can submit their proposals, an RFP must be drafted by the company requesting the work. Some companies may request one more best and final offer from their top vendors after they’ve started this negotiation process to ensure they’re not only getting the right person or company for the job, but at the right price, too. And to save you even more time, it would be up to potential contractors — not you — to reach out. Here’s What Not To Do With an RFP If you want to find the right vendor, you need your RFP to be specific. And if proposal tools are out of the budget right now, or if you’d like to try your hand at creating your own first, use this template as a starting point. Existing Roadblocks Or Technical Issues [Here, you’ll want to outline any time, resources, or other constraints that will affect both the proposal and the project.] Contact Information For questions or concerns connected to this RFP, we can be reached at: Over To You Now that you have a better idea of what an RFP is and how to create your first one, you’re ready to get started.
Have you been tasked with the job of creating a request for proposal, or an RFP?
Whether you have no idea what that is or haven’t written one in awhile, today’s guide can help.
We’re diving into the specifics of what an RFP actually is, why you might need one, and how to create your very first one today.
To start, you should understand what all these letters even mean.
What is an RFP?
Companies may issue an RFP, or a request for proposal, when choosing a vendor or service provider to work with. This document outlines project specifics such as scope and price and asks potential vendors to come back with a bid for the work. Multiple bids are then compared to help determine the best choice.
When your company has a new (often large) project, or one that’s more complex and requires a bit of outsourcing, an RFP can help you get the job done right the first time.
The RFP doc becomes a way for you to quickly uncover the strengths and weaknesses of potential vendors in relation to your project without having to spend too much of your time hunting for them yourself.
RFPs can also give you a sneak peek into different strategies you may not have considered since each vendor will include their own unique action plan along with their bid.
And you’ll have this information before you ever have to commit to the vendor.
Keep in mind, this should not be confused with an RFQ.
RFP vs. RFQ
An RFQ, or request for quotation, is slightly different than an RFP since it’s just the quote itself. Here, companies solicit multiple price quotes from various vendors to compare services based on price alone. While an RFP includes a price quote (along with several other specifics), an RFQ does not detail anything other than price.
As opposed to an RFP, an RFQ is a request for quote or quotation.
Here’s how to understand the difference:
While you’re technically receiving a quote in an RFP, you’re also getting information like the action plan, timeline of completion, deliverable schedule, and the list of services provided as well.
But with an RFQ, you’re only receiving the quote itself for the service or products you’re interested in purchasing.
In most cases, simply comparing quotes is not enough to see if a potential vendor is the right fit for your company, which is why an RFP is more appropriate in these situations.
The RFP Process Explained
Before potential bidders can submit their proposals, an RFP must be drafted by the company requesting the work. (P.S. We’ll show you how to do this later in this guide)
This gives potential contractors a better idea of what your company is looking for.
Once your RFP is sent out, contractors or vendors can review it and submit their best bids to compete for the job.
In these proposals, vendors generally include the following items:
- An action plan of how they’re going to solve the issue
- A timeline of what you can expect
- Any necessary background information
- How much they expect the entire project to cost
In certain cases, bidders may come back and say specific components of the RFP need to be adjusted based on their experience in the industry.
At this point, you can either review their feedback and create a new RFP to adjust for the changes, or you can leave the original as is and keep it in mind while considering the other submitted bids.
Once you receive all the proposals, it will be almost effortless to compare each one and determine which vendor is the best fit for your company.
Out of the stack of bidders, you’ll want to narrow this down to a handful of your top three, five, or 10 favorites to consider, depending on how many you receive or are interested in.
From here, you’ll want to spend time vetting potential vendors further to determine who’s really the ideal fit for the job.
Some companies may request one more best and final offer from their top vendors after they’ve started this negotiation process to ensure they’re not only getting the right person or company for the job, but at the right price, too.
While this may sound like an extra step, it’s one that may save you money, time, and headaches down the road.
But this also leads us to a big question: Is all of this really necessary?
Can’t you just spend time reviewing two or three vendors on your own?
As you’ll see next, that route is definitely not in your best interest.
Why Issue a Request for Proposal?
Let’s briefly compare these two scenarios:
- Option #1: Spend time finding the perfect vendor on your own.
- Option #2: Use an RFP to get potential vendors to come to you.
Choose the first route, and you’ll probably use your coworkers, friends, and networking groups to help solicit possible referrals for the job.
Or you might perform a Google search to check out the top vendors in your area.
After you review the website of a possible candidate for the job, you’ll craft the perfect message to reach out and learn if they can even help.
Then, you’ll have to explain the specifics of your project and you may or may not ask them to submit a proposal before deciding to choose them for your project.
It’s not a complicated process, but did we mention you have to repeat it for every promising referral or vendor you come across?
Imagine how long that’s going to take!
Now, what if these potential contractors already knew your project details and they came back with their best plan of action and a formal bid for you to review?
So instead of having to explain your needs each time, you would simply outline it once, and send it out to the masses.
And to save you even more time, it would be up to potential contractors — not you — to reach out.
The RFP route also gives you a sneak peek into each vendor’s real plan of action, not the one they talk you into over the phone or in person.
Since potential candidates have to submit a formal bid,…
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