Every time the government, military or a commercial agency wants to make a substantial purchase, they begin by issuing a request for proposal (RFP) which spells out a number of requirements that need to be satisfied for the proposal to be accepted. Suppliers, in competition with one another, will then submit proposals that specify how many of the requirements have been complied with and at what price, in case the proposal gets the acceptance of the agency issuing the bid request.



In other words, a request for proposal is an invitation to suppliers via a tender process to make their bid for a specific product or service. An RFP constitutes an important part of the overall enterprise sales process.

The commercial environment is not bound by any hard and fast rulebooks or laws that cause an RFP to be written in a specific way. There is first of all the need to clearly spell out the requirements of the project and this leaves ample space for creativity.

But, the document does not wholly revolve around just the price factor. It certainly needs other important inputs such as basic company profile, history, financial information (is the company solvent enough to deliver?), technical capability and expertise (especially in cases where the product or service is technology driven), product information such as the quantity of stock available, expected completion date and customer references to establish the credentials of the company and ascertain its suitability for the contract.

Most RFPs include the specifications of the item, project or service for which the proposal is requested. It is of vital importance that these specifications be very clear, concise and specific as this will enhance the possibility of putting across a more accurate picture of what is required.

In turn, the bidder has to submit the proposal by a specific date and it is at the discretion of the client whether to accept late submissions or not. The proposal is the basis of assessing the suitability of the supplier, vendor or institutional associate. A round of discussions may follow with regard to the proposals submitted, clarifications of technical competence and to thrash out any errors contained in the proposal.

It is common practice for most companies to not have any RFP guidelines, procedures or props. These companies may draw heavily upon their past history as well as on RFPs that already exist within the company from previous projects. However, it is advisable for these companies to obtain guidance from competent sources, such as consultants.

The request for proposal holds some very important information including the name of the proposal, the name of the company and a reference number. Also mentioned is the name of the manager of the project, the anticipated start date and the estimated date by which the project will be completed and the location of the proposed works.

The form also has the name, addresses, state, zip code and telephone and fax numbers of the client as well as the contractor. In addition, the type of contract has to be mentioned, e.g., lump sum, services, combined or if it is a fixed price then that amount needs to be specified. The nature and scope of the work has to be mentioned.

Any good RFP will have a breakdown of the quoted price that shall detail time and material in units, quantity, rate per unit and the total cost. This will hold true for labor and material as well. In addition, all expenses like airfare, local travel and other expenses will have to be furnished.

Finally, the signature of the contractor and the approval by client is necessary for the request for proposal to be completed in accordance with set procedures.