Most of your business associates are likely aware of the term RFP and what it stands for. They might not understand how it is used by purchasing professionals, however they should know it is a formal procurement document sent out to solicit responses from other businesses or suppliers.

The RFP document is a Request for Proposal form and a company would typically opt to send it out to three or more vendors or suppliers. When issued, it is expected the vendors or suppliers you decide to select or include are qualified to generate a desired response to the Buyer’s needs.

A qualified vendor is often:

1. A supplier you have done business with before
2. One you recently pre-qualified using a formal process
3. They come recommended from other business associates or
4. Have client references you can check

Always narrow your vendor list down to supplier’s you know will submit a quality product and service. It is not considered a best practice to submit requests to vendors which may provide a sub-standard service or poor quality product.

Much is at stake when making a selection and product quality or best price is now no longer the only determining factor when deciding whom to award your business to. Most companies will look at your safety records, insurance coverage, environmental policies, delivery history, and payment terms and so much more so buying just on price is no longer considered the single determining factor.

Back to preparing the RFP – a request for proposal allows your qualified vendors to make a submission or a “proposal” which they think will work based on the SOW (Scope of Work) specification you have clearly identified in your proposal. In many cases, the Vendor is more qualified and can put forward a better recommendation or solution than one made internally by colleagues. They often have the engineering or expertise to back up the product so it is important to factor in their recommendations. It is important to understand a RFP – Request for Proposal is not a RFQ or Request for Quote. A RFQ is generated when the Buyer knows exactly what is needed. The RFP allows the Vendor to analyze your situation and put forward a custom solution.

When preparing a RFP, it should include different sections and they will all vary in length and complexity. Some organization will include a section on general conditions and a section on special conditions. Typically, these instances relate to bigger cost requirements or items.

Prepare your RFP to the best of your ability by cherry picking terms from past tenders, proof read your document, did we say proof read, invite a co-worker or third party to review the wording and last prior to distribution consider having your companies legal counsel review your RFP if the risk warrants.

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Filed under: RFP - Request for Proposal

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