When buying yourself something, like a pair of running shoes, you likely have certain requirements: a good price, colorways, and cushioning. You want every detail to be to your taste. To choose the best shoes, you might compare features online or go to your local running store to try on a few pairs before deciding.
When you need to make a big purchase that impacts your business, the procurement process looks a little different. You may require more customization and need vendors to detail how they’d tailor their product or service to your business’s specific needs—and what that would cost.
That’s where a request for proposal, or RFP, comes in.
What is an RFP?
A request for proposal is a formal business document your organization issues to solicit bids from a service provider for a specific project. RFPs explain your project’s requirements, objective, and evaluation criteria, detailing what the vendor needs to include in its proposal. When you receive proposals, you can then compare how various bidders can meet your needs.
Government agencies, nonprofits, and businesses solicit proposals to compare potential vendors for complex projects, especially those that involve subcontractors. For government agencies, an RFP is a project announcement posted publicly that starts an official competitive bidding process.
You might create an RFP for a construction project like building a brick-and-mortar store or a new office space, if you’re looking to hire a branding agency, or if you need a custom software solution.
RFP vs. RFQ vs. RFI
It’s easy to get bogged down with acronyms like RFP, RFQ, and RFI (request for proposal, request for quote, and request for information, respectively). Each document directs a request to prospective vendors, but the intent varies.
While an RFP requests a comprehensive outlay of how a vendor would complete a particular project, the other two types of requests are less formal.
A request for information (RFI) is a document used to gauge interest and gather information. For example, if you want to redesign your product packaging to be more eco-friendly, you might reach out to a few different suppliers. You’d want to get a sense of the sustainable packaging materials they offer and their relative merits; you can then use that information to create a realistic RFP.
A request for quote (RFQ) is generally for less complex, lower-cost services to estimate cost only. For example, you might request a quote to repair a window, but a proposal to construct an entire building. An RFQ doesn’t need to be a document; you can request a quote over the phone, via email, or in person. If you’re a service provider, you might even have an RFQ form on your website.
A request for proposal (RFP) is therefore the most formal and comprehensive of the three.
RFP benefits
Why go through the entire RFP process of researching and writing a formal document and soliciting bids rather than just chatting with a few vendors? There are a few reasons:
Get more bids
Government agencies often publicly release RFPs to ensure a competitive and fair bidding process, allowing all qualified contractors to vie for the contract.
Any business can take advantage of an RFP, which makes it easy to reach out to a larger pool of vendors using a single document. You can send it to a group of vendors you’re interested in working with or publicly posting your RFP can attract exceptional candidates beyond your network.
Develop a realistic budget and timeline
You may already have an idea of your budget and timeline when you draft your RFP, but receiving proposals from various vendors helps ensure your estimates are realistic.
Make it easier to compare vendors
Providing all potential vendors with the same information and selection criteria helps you compare them. Instead of independently researching each vendor and speculating on their capabilities based on publicly available information, you can review a set of proposals tailored to your specific needs.
RFP process
No matter the size of your organization and scope of your project, the RFP process looks something like this:
1. Write the RFP
Once you finalize most of your project details, writing your own RFP document is fairly straightforward. Drop the relevant information into a request for proposal template.
A good RFP template can save time and ensure you include all necessary elements. Review RFP templates and RFP examples to find the format that suits your vision. It should cover the full project scope and specify a due date that gives vendors enough time to put together a thorough proposal. You should also outline your selection criteria, which ensures proposals are evaluated fairly by providing a standardized and transparent method of evaluation.
2. Share the RFP
Send your RFP to specific businesses, post it publicly on your website, share it on social media, or post it on industry-specific websites. How and where you share your RFP depends on how many proposals you want to receive and how comfortable you are sharing your project details.
3. Receive bids
Complex projects will require more time. Make sure you have an organizational system in place to collect and store responses as they come in, like a spreadsheet to track and evaluate proposals or a dedicated project management tool like Trello or Asana to organize and store responses. Seek clarification if any of the bids are lacking specific details.
4. Evaluate bids
After the due date, evaluate the proposals and select the winning bid. Use the selection criteria you created when writing the RFP. Depending on how many proposals you receive, you may want to narrow down the pool to a shortlist of top candidates before making your final selection. This allows you to meet with the finalists and address any remaining questions.
RFP structure
- Background
- Project overview
- Project timeline
- Constraints
- Deliverables
- Evaluation criteria
- How to respond
If you want to receive strong proposals, you need to give potential vendors all the relevant details. Here’s what to include in your RFP outline:
Background
Start your RFP with the project name and background information about your business including your mission, size, founding year, and relevant details that provide context for your project.
Project overview
Your project overview provides a detailed description of the project. Be clear about your business goals or current pain points while allowing bidders the creative freedom to propose their own solutions.
For example, if you’re requesting proposals from different architecture firms to remodel your recording studio, include basic information like the types of equipment and number of people the studio needs to accommodate.
You can also highlight problems with your current space—maybe the bathroom door makes a loud sound when opened and closed. It’s up to the architects to propose different solutions, such as changing the door design or adding additional soundproofing. If you just ask them to move the bathroom without providing this useful context, you can miss out on innovative solutions that can help your budget.
Project timeline
Expect that vendors may have other clients and obligations. Clear project timelines communicate when you need your project done and can help eliminate vendors who aren’t available when you need them.
Note particular milestones so potential vendors can provide accurate timelines. For example, if you’re a consumer packaged goods business soliciting proposals from branding agencies, you might have a specific deadline for the product packaging design based on your manufacturer’s requirements.
Constraints
Describe any constraints or potential roadblocks so vendors can explain how they can meet your requirements (or decide to opt out). Constraints include budgets, regulatory requirements, licensing requirements, and technical requirements.
For example, if your team uses both Macs and PCs, and you’re looking for a software solution everyone can use, note that the software needs to work seamlessly on both systems.
Deliverables
Outline the specific deliverables you expect to receive at the end of the project. For example, if you’re working with a branding agency, do you need them to create brand guidelines and design your website, or do you also need a physical packaging design? If you’re looking for custom software, will you also need onboarding or support services?
Evaluation criteria
Develop your submission criteria before you start reading proposals. That way, you can share it with vendors, who can tailor their proposals to your business priorities.
For example, if the most important criterion is staying under budget, a vendor might propose cutting some premium features. If you have a tight schedule but flexible budget, they may propose going slightly over budget to meet deadlines.
How to respond
Tell prospective vendors how to respond to your FRP: Is there a deadline? Do you prefer to receive the proposal in a specific format, such as a PDF? Where should vendors send or upload their proposals?
Be sure to include these details in your RFP, so you get the response and file format you are looking for.
RFP FAQ
What is an example of an RFP response?
The RFP response is a pitch outlining how a service provider will achieve the requesting business’s goals. For example, an RFP response to a business looking to redesign its website may include an outline of how the vendor will increase the site speed and create a more intuitive layout, along with projected cost, timeline, and case studies highlighting previous success with similar projects.
How do you write an RFP?
You can write an RFP using an RFP template. Your RFP should include background information on your organization, the scope of the project, constraints, and the criteria you’ll be using to evaluate proposals.
Who usually writes RFPs?
Anyone can write RFPs. Depending on your organization, a project manager or communications specialist may write and manage RFPs for your business.
