Use our request for proposal to collect proposals from vendors for products and services.
Updated August 19, 2024
Written by Ioana Gagiuc | Reviewed by Brooke Davis
A request for proposal (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 a detailed RFP to quickly and efficiently evaluate vendor capabilities.
An RFP is a document you create when buying products or services from vendors. You can use this document to openly announce that you have funding available to invest in a program/project or purchase products/services.
Interested companies or vendors respond to your RFP by placing bids. This form helps you gain as much information as possible about the products or services you wish to buy so you can decide who to enter a business contract with.
Example:
Suppose a mid-sized company needs to implement a new enterprise resource planning (ERP) system. By issuing an RFP, the company received 15 proposals from various vendors, each offering unique solutions. After evaluating the bids, the company was able to select a vendor who provided a cost-effective solution that met their specific requirements, leading to a successful ERP implementation within budget and on time.
The RFP process varies from business to business, but in general, it comes down to four stages:
The RFP process begins with discovering a need for your business. Consider what services or products you’d like to purchase and how they can improve your company’s operations.
Once you identify your company’s needs, you can think about how an eventual purchase may affect the company’s current budget, other ongoing projects, internal departments, and existing business partnerships. Also, consider who could manage the RFP process to ensure it goes smoothly.
You’ll want to set up a meeting with relevant stakeholders to discuss pertinent information.
Example:
A healthcare provider realized that its outdated patient management system was causing inefficiencies and patient dissatisfaction. After meeting with department heads, the provider identified the need for a new system that could integrate with existing software and improve patient scheduling. This discovery led to the creation of an RFP focused on these specific needs.
The second step is the writing and issuing of the request for proposal. It needs to be thorough and well-written so vendors understand the project and can provide comprehensive solutions.
As vendors send you responses, you’ll want to use the parameters you discussed with stakeholders to score each. Eliminate the bids that fail to meet your non-negotiables, identify unique selling points of different vendors, and shortlist those that stand out.
Example:
An educational institution issued an RFP for a new learning management system (LMS). After receiving numerous proposals, the evaluation team created a scoring system based on the institution’s non-negotiables, such as ease of use, scalability, and integration capabilities. This system helped them quickly eliminate proposals that didn’t meet these criteria and shortlist three vendors for further consideration.
Once your deadline for receiving bids closes, compare the vendors you’ve shortlisted to make a decision. Check their strengths and offers 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 necessary before you make a decision.
Once you’ve identified two or three leading bidders, start negotiating a price, lock in a cost, and arrange a contract with your final choice. Depending on the agreement you’ve decided on, you may want to use a service agreement.
When you follow a structured process for writing a request for a proposal, it’s much more manageable. You can write a more effective RFP by following the steps outlined here.
Before you start writing, you need to know your RFP’s requirements. These requirements are typically:
Identify these requirements before drafting the proposal request because it will make writing the subsequent sections much more straightforward.
Your request for a proposal should state who it’s for and how to contact your company.
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 to help organizations decide if they’d like to work with you.
State precisely 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.
For example, if you’re designing a new software program, you might need a software engineer’s services.
After you’ve indicated the exact products or services you require, please describe why you need them. What will your company do with these products or services, and why should vendors bother submitting a proposal? Also, give your project a name to make it easier to describe.
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.
You can also include how you plan to measure the project’s success. This way, the reader will know what to expect going forward.
List the volume of products you require or the extent of the services you’re asking for.
Example:
A city government seeking to improve its public transportation system might set a scope for the project by specifying the number of new buses required, the expected service routes, and the technological features needed for real-time tracking and eco-friendly operations.
Include a realistic timeline divided into chunks so vendors can easily compare it to their schedules and determine if they’d be a good fit.
Choose a bid deadline that gives you enough time to evaluate each one carefully.
Describe how proposals should be submitted. Include the preferred format and specify if vendors should send their suggestions to a specific person or department.
Finally, include elements of a winning proposal. Mention the specific selection and evaluation criteria to determine who you will choose.
Check out our free request for a proposal template to start soliciting vendor proposals. Download it as a PDF or Word file below:
