The purpose of an RFP (request for proposals) can differ based on context. We generally use RFPs to encourage qualified parties to submit their project or solution ideas, or to solicit vendors to demonstrate their qualifications to complete the project.
RFP vs. RFI vs. RFP: What’s the Difference?
- RFP (request for proposals): RFPs are documents that set expectations and define requirements of a desired capability, service or solution.
- RFI (request for information): RFIs are less formal than RFPs. The request is merely seeking information on a particular topic, service or solution.
- RFQ (request for quotes): RFQs are best to use when you have a good sense for the solution but are seeking information or bids on the pricing structure.
Why Are RFPs Important?
RFPs are important documents that set expectations and define requirements of a desired capability, service or solution. In many cases, RFPs are used to initiate competition among vendors, where each service provider or agency feels pressured to present the best proposal they can to win the business. In some cases, especially government agencies, RFPs are required to ensure equal opportunity to all those eligible to participate.
When Do You Use an RFP?
There are a few instances in which you would use an RFP:
You may way to receive bids for desired business solutions or proposed IT projects on behalf of an organization.
You might be interested in soliciting proposals from cybersecurity and risk management companies that perform risk assessments;
Or you may be seeking qualified vendors that can provide services to meet specified needs across various industries including:
What’s Included in an RFP?
In most use cases, like those mentioned above, an RFP is a formal document with multiple sections that detail the specifics of the proposals the requestor seeks. Generally, an RFP includes the following information:
- Overview/Introduction: The introduction is typically a brief overview of the organization or business units involved in the RFP.
- SOW (Statement/Scope of Work): The SOW provides details on the specific solution or services sought. For technology-related RFPs this section may also include hardware, software or functionality requirements. This section also includes tasks expected to be performed by the winning bidder as well as relevant deadlines for deliverables.
- Additional Requirements and Proposal Requirements: These sections typically detail requirements not included in the SOW as well as what’s required to be included in submitted proposals.
- Evaluation Criteria: This section provides details related to how the submissions will be evaluated and, eventually, what proposal has been chosen for execution.
As I mentioned, an RFP can vary depending on the context of its use. This holds true for the sections included in an RFP. Many companies have existing templates they use for RFPs that align with how their RFP process operates so the sections can vary, especially in relation to the submission rules and restrictions. Additionally, some RFPs may warrant the attachment of supplemental materials like a schedule of related events or documents referenced within the RFP.
RFP use within government agencies, however, tends to be more rigorous with requirements defined in an overarching RFP standard. These standards may describe the minimum requirements that all RFPs must meet. This is most often done to ensure RFPs are consistent and all-encompassing across the respective agency or government body.
Alternatives to RFPs
Although RFPs are common in the business world and within government agencies, they are not always the only options. Other “request for” (RFx) documents may be used instead depending on the situation. Below are some alternatives to RFPs that may be more appropriate when an RFP isn’t warranted.
RFI (Request for Information)
These documents are less formal than RFPs in the sense that the request is merely looking for detailed information on a particular topic. RFIs will not include SOWs, specifications or requirements. Rather, they will ask questions about an agency’s qualifications, services, work samples and more.
RFQ (Request for Quote)
RFQs are used once a company decides on what they want (typically after RFIs and RFPs are exchanged) but still need to understand the pricing model. Within an RFQ, a company will ask questions about the pricing of the service or solution they are looking to acquire.
RFT (Request for Tender)
Most similar to RFPs, an RFT provides an opportunity for potential suppliers to submit proposals to supply goods or services at a specified price. In simple terms, an RFT is a bid that the recipient can either accept or reject. Unlike RFPs, RFTs are usually issued after funding for procurement of a solution or service has been approved.
While RFx documents and their uses can be confusing, thinking of them within the context of a procurement process can help. Here’s how it typically works.
- RFIs are issued when an organization is interested in vendor qualifications, services, solutions and so on. These are used early in the procurement process to gather general information about prospective vendors.
- After RFIs are reviewed, the pool of vendors may be reduced and the business will proceed to send either an RFQ, RFT or RFP. Which one they send depends on their internal procurement process as well as the scope and level of detail required.