Request for Proposal (RFP)
A request for proposal (RFP) in the context of sales is a document issued by a company when soliciting bids for a specific product or service to meet an organizational need.
The RFP sits at the core of any procurement process, especially in complex or large-scale purchases, and typically includes a statement of requirements that will need to be met by prospective respondents who wish to make a bid for that company’s business. The RFP should also include:
- A detailed overview of the company issuing the RFP and its goals for the project or purchase to provide potential bidders with context.
- Guidelines and instructions on how and when to submit proposals, key deadlines, format requirements, and any necessary paperwork that must be submitted.
- An outline of how proposals will be evaluated and any criteria that vendors will be assessed against, such as price, expertise, and track record.
- RFPs may also specify the budget the issuing organization is working with or ask vendors to provide pricing in their proposals.
The process of completing a proposal has changed over the years, with businesses taking a software and AI-driven approach to RFP automation.
RFP Evaluation Criteria
Request for proposal (RFP) evaluation criteria refers to the specific standards or benchmarks that an organization uses to assess, compare, and score vendor proposals received in response to a request for proposal.
RFP evaluation criteria are important because they reflect the needs of the company that issued the RFP and are used to objectively evaluate the strengths and weaknesses of each proposal in a way that’s fair and structured.
Examples of evaluation criteria might include:
- Cost—This is, perhaps understandably, often a primary factor and involves looking at the total cost of ownership including initial capital outlay, implementation costs, and ongoing upkeep.
- Quality—Assessing the overall quality and suitability of the vendor’s proposed solution ensures that it will meet the issuing company’s required specifications and standards.
- Vendor reputation—Companies might evaluate the vendor’s track record, experience in similar projects, and industry reputation.
- Delivery timeframe—For time-limited projects, issuing companies might account for how long it will take the vendor to deliver the solution.
Having clear RFP evaluation criteria helps to improve overall confidence in vendor selection and ensure high-quality responses to the RFP.
Request for Information (RFI)
A request for information (RFI) is a formal request for written information that’s submitted by buyers to suppliers and vendors.
A business will typically begin sending out RFIs in the earliest stages of procurement, well before a request for proposal (RFP) or request for quotation (RFQ) when the need for a particular product or service has been identified. The idea of submitting RFIs to various vendors is to enable information gathering about the capabilities of potential suppliers in meeting organizational requirements.
In essence, an RFI is a research tool used to inform decision-making and strategy development for future procurement activity. Responses to RFIs help buyers gain a better understanding of what’s available on the market and refine their strategy or requirements for subsequent RFP or RFQ processes in response.
