Request for Proposal (RFP)
When a complex business requirement has been defined a company is then ready to find a vendor to fulfill the requirements. The first step in finding a vendor is to create and send out a Request for Proposal (RFP). The RFP document should contain in detail every aspect of the business requirement, and what the company requires from a potential vendor to fulfill the requirements specified in the RFP.
The vendor will produce a bid based on its understanding of the requirements specified in the RFP, and the competing bids will be evaluated to produce either the selection of the winning vendor or a short-list of vendors who will then deliver presentations to the company.
Defining the Request for Proposal Document
The RFP document is crucial to obtaining a vendor who can fulfill a customer's business requirements. If the document is flawed, either by ambiguous requirements, missing requirements, or unreasonable requirements on the vendor, then the RFP process will lead to incomplete bids, or in some cases, no bids at all. Vendors are not required to submit bids to every RFP they receive, and even if they could fulfill the RFP requirements, they may not have the capacity to deliver the requirements in a timely fashion. The later is often found when a customer sends RFP's to smaller vendors who may be leaders in their field but do not have the means or capacity to fulfill the customer's needs.
Every RFP will be different based on the requirements that have been defined and the specific needs of the customer. Even within the same company, an RFP document may differ in focus depending on the primary requirements. For some RFPs, the focus may be on price, while others may focus on delivery times or the quality requirements for the items needed.
Specific Features of the RFP Document
There are some features of the RFP document that are required. For example, each RFP should have a specific date and time on which the customer requires all potential suppliers to have submitted a bid. If bids are submitted after that date, they should be discarded. If a vendor cannot submit a bid on time, then this could indicate a possible issue with the organization and maybe delivery concerns.
However, the customer must give vendors adequate time to submit a bid. If the requirements are particularly complex, vendors may need to assemble a response team to break down the requirements into areas that they can understand and then assemble a bid. If the timeline defined in the RFP is too short, responses may be rushed and vendors may be guessing at the complexity of the project, rather than fully understanding it. This will lead to inaccurate bids and a wasted RFP process.
The RFP document should indicate the process if vendors have additional questions on the requirements specified in the RFP. Vendors should not be allowed to call the customer as this can lead to one vendor being given additional information that gives them a competitive advantage.
It is best to arrange a conference call so that representatives of each vendor can ask and listen to questions directed back to the client. This ensures a fairness in the bidding process.
An RFP document must also clearly specify the format the vendors RFP response. If this is not clearly defined, responses will be sent that are in different formats and it would be impossible to compare vendor's bids. The response format should identify what is required from the vendor in each section, such as references, resumes of potential team members, a document with the vendors understanding of the requirements, and a format for the pricing. If each vendor adheres to the correct response format, this will make a comparison of the bids easier.