A request for proposal, or RFP, allows you to collect offers from various vendors who can provide goods or services your business needs. To identify the right vendor, you need an effective, detailed RFP so you can quickly and easily evaluate vendor capabilities.
This guide helps you understand what a request for proposal is, what you should include, how to write one, and includes a free RFP template.
What Is a Request for Proposal (RFP)?
An RFP is a document you create when you need to buy products or services from vendors. You’re openly announcing that you have funding available for a program or project, or to purchase products or services. Interested companies or vendors respond by placing bids for that project or those services. This form should help you gain as much information as possible about the products or services you wish to buy, so you can make an informed decision.
What Needs to Be Included in a Request for Proposal (RFP)?
- Background and introduction
- Project name and overview
- Problem to be solved (Goals and scope)
- Point of contact
- How and where vendors submit proposals
- Timeline constraints
- Elements to include in the proposal
- Tasks to be completed by winning bidder
- Evaluation criteria
- Potential limitations
- Budget
RFP Process
Once your business has happened upon, or identified, a project that requires an RFP, you’ll need to go through the RFP process. The RFP process varies from business to business but in general, it comes down to four steps:
- Discovery
- Writing and sending the request for proposal
- Evaluating and shortlisting proposals
- Choosing a winner and creating a contract
Step 1 – Discovery
Before writing your request for proposal, you need to conduct some internal planning to make the process as effective as possible. You’ll want to start the RFP process with a discovery phrase that includes your key stakeholders to identify:
- What should go into the request? – Set project boundaries, deadlines/timelines, and how much you want to spend.
- Who should manage and oversee the RFP process? – Identify what departments or individuals should draft a solid RFP and evaluate the proposals to identify the best vendor. Choose departments or individuals that have the best knowledge of the project and the business needs.
- What could the purchasing decision affect? – Consider how the purchasing decision could affect the company’s budget, other ongoing projects, and even internal departments and existing business partnerships.
You’ll want to set up a meeting with relevant stakeholders to discuss the above. You should also cover business objectives and goals and decide your expectations from the bidders and what makes the ideal bid, such as timeline, functionality, etc.
Step 2 – Writing and Sending the Request for Proposal
The second step is the writing and issuing of the request for proposal. This is the most important part of the process and needs to be well written so vendors understand the project and can provide comprehensive solutions. You can learn how to write a request for proposal here and download a template below to make the writing process easier and more efficient.
Step 3 – Evaluating and Shortlisting Proposals
As vendors send you responses, you’ll want to use the parameters you discussed with stakeholders to score each one. Eliminate the bids that fail to meet your non-negotiables and begin to identify unique selling points of vendors and shortlist those that stand out.
Step 4 – Choosing a Winner and Creating a Contract
Once your deadline for receiving bids closes, compare the vendors you’ve shortlisted to make a decision. Check their strengths and offer against your RFP and look at previous client reviews. Contact any of the vendors if you have additional questions or think a meeting may be required before you make a decision.
Once you’ve identified two or three leading bidders, start negotiating a price and then lock in a price and arrange a contract with your final choice. Depending on the agreement you’ve decided on, you may want to use a partnership agreement or a service agreement.
How to Write a Request for Proposal (RFP)?
When you follow a structured process for writing a request for proposal, it’s much more manageable. By following the steps outlined here, you’ll be able to write a more effective RFP.
1. Gather the Requirements for Your RFP
Before you start writing, you need to know what the requirements of your RFP are. These requirements are typically:
- Scope of the project
- Project goals
- Budget
- Timeline
- Potential limitations
Identify what these requirements are before you begin drafting the proposal request because it will make writing the subsequent sections much easier.
2. Add Your Company Name and Contact Information
Your request for proposal should state who it’s for and how to get in touch with your company.
3. Provide Company Background and Portfolio
An RFP should persuade vendors to bid on your project. Give them a full picture of your company, including your history, mission, goals, target customers, sales performance, and other pertinent information that will help organizations decide if they’d like to work with you.
4. Describe the Services or Products You’re Requesting
State specifically what you’d like the vendor to do or provide. If you aren’t sure of exactly what you need, go back to step one and gather RFP requirements again.
5. Provide Project Details and Project Name
After you’ve indicated which exact products or services you require, describe the reason you require them. What will your company do with these products or services and why should vendors bother proposing? Also, give your project a name to make it easier to describe.
6. Indicate the Goal of the Project
Describe what you hope to accomplish with the products or services the vendor will provide. Are you trying to make your business run more smoothly, or expand an offering to your customers? Include these goals in the proposal request.
7. Set a Scope for the Project
List the volume of products you require or the extent of the services you’re asking for.
8. Give a Proposed Timeline and Set Milestones
Include a realistic timeline divided into chunks so vendors can easily compare it to their own schedules and determine if they’d be a good fit.
9. State When Bids Are Due
Choose a deadline for bids that gives you enough time to evaluate each one carefully.
10. Provide a Point of Contact for Your Company
Describe how proposals should be submitted. Should vendors send them to a specific person or department? Include those details in the RFP.
11. Indicate What a Proposal Must Include
Finally, include elements of a winning proposal. What should bidders include that will make it easier for you to evaluate?
The easiest way to write an RFP is to look at examples. If your company previously issued a request for proposal, you can work from it as a template. You can also use a document builder from Legal Templates, filling in your information and project details to create an RFP.
Request for Proposal (RFP) Sample
To help you write an effective proposal request, we’ve provided a free RFP template that you can modify for your business needs:
Request for Proposal
Tips for Writing a Request for Proposal
Consider the following factors to help you write a more professional, effective RFP:
- Collaborate: It’s likely more than one team will be impacted by the purchase that results from the RFP. Include all those teams into the writing process early, so you avoid delays or miscommunication later on.
- Create a template library: Keep a library of standard RFP templates and questions to ask that can help you write a new RFP more quickly.
- Choose the right document: Consider if a request for proposal is the right document for your needs, or whether a request for information, request for qualifications, or request for quotation might be more appropriate. If so, you may need to break it up into a multi-step process.
- Be transparent: Use clear, honest language in your RFP. Vagueness is frustrating for vendors.
- Customize: Always update and customize an RFP template. If you use an old RFP from a previous collaboration without making the necessary changes, it will confuse current vendors.
Why Do You Need a Request for Proposal?
Increased Number of Potential Bids
By putting out a formal RFP, you make it known publicly that you’re seeking particular products or services. When more potential vendors see your RFP, the number of bids you receive will increase, allowing you to make a better choice.
Encourages Competition Between Collaborators
An RFP creates a sense of competition between potential collaborators and encourages them to offer their best services and fairest rates. You end up getting high-quality work at a decent price.
Better Organization
The proposal request process is structured and when you handle it correctly, it allows for smooth communication and better planning between you and your collaborator. The stakeholders in your business can also see how the project will go and the benefit it will have for the company.
Request for Proposal FAQs
What is the Purpose of Issuing a Request for Proposal?
The purpose of issuing a request for proposal is to open up the competition and encourage proposals for a specific project that a company proposes. An RFP outlines specific requirements for a particular project and the RFP process helps a company solicit proposals from vendors and identify which one is the best suitable, or has the best offer, to complete the project.
When Should You Use an RFP?
If your business has a specific need that can’t be met internally, then an RFP can help you bring in external resources that can provide the skills and expertise required.
What makes a good request for proposal?
A good request for proposal should include:
- The scope of the project
- The goals, budget, and timeline
- Any limitations
- Criteria that will be used to evaluate any submitted proposals
- Additional aspects you’d like to have (as opposed to non-negotiable requirements
Is a request for proposal legally binding?
A request for proposal isn’t legally binding but it can lead to a legally binding contract being signed if a vendor meets the requirements of the business using an RFP.
What is the difference between an RFP and an RFQ?
The difference between an RFP and an RFQ is that an RFQ is a request for quote and an RFP is a request for proposal. An RFQ is used when you want a price for a product or service that you want, while an RFP is used when you need to evaluate more factors than just the price before making a decision.
What is the difference between an RFP and an RFI?
The difference between an RFP and RFI is their purpose. An RFP is a request for proposal and is used to seek out products or services for a specific project. An RFI is a request for information and is used when a business knows what it requires from a vendor and just requires more information.