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. Before we cover other areas to review when preparing a RFP let’s touch on Vendors for a moment. When the RFP is issued, it is expected the vendors or suppliers you decide to select or include in the bid 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 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.
A request for proposal is a solicitation often made through a bidding process by a company or agency interested in acquiring a service, commodity or an asset from a Supplier. This document is intended to provoke potential Supplier’s to submit proposals for the supply of the requested items. An RFP is normally submitted in the early stages of the procurement cycle either at the procurement or at the preliminary study stage and dictates the preliminary requirements for the service or commodity being requested and may also prescribe, to some extent, the exact format and structure the supplier should respond to the request.
Effective request for proposals will typically reflect the plan and long/short term objectives of the business; providing a detailed insight through which the supplier is able to offer a corresponding reply to the request. This form of request is quite similar to a Request For Information (RFI) and a Request For Quotation (RFQ).
Principally, a request for proposals will:
• Inform the supplier that the organization is looking to purchase services or goods from them and encourages them to (more…)