An RFP, Request for Proposal, is the preferred way for many companies to do business. In fact for some organizations, like the U.S. government, it’s the only way.
You may be familiar with the term or perhaps even contributed some information to an RFP response, but do you truly understand the RFP process? It’s a tightly structured one designed to level the playing field for businesses that want to work with a particular organization.
It’s easy to fail to get work because you were tripped up by the RFP process or overwhelmed by the RFP itself. Let’s take some of the worries away and look at what’s involved in the RFP process.
We might as well start at the beginning and look at what an RFI is. An RFI is a Request for Information.
It’s a way for one company to say to another, “Tell me a little bit about yourself.” Let’s look at an example involving an organization we’ll call Agency X.
Agency X is a U.S. government agency that wishes to upgrade its customer service equipment and install a touchscreen kiosk in its waiting room.
The first step that Agency X would take is to issue an RFI. The goal of the RFI is to find a pool of companies who might have the potential to create the needed kiosk.
The RFI will ask a standardized set of questions concerning a company’s history, capabilities, future plans, ownership, and other key details. When Agency X has gathered all responses it will be able to use them to create what it feels is a qualified pool of potential contractors.
The next step in the process is for Agency X to issue an RFP. The RFP will provide details on Agency X and what it does. It’ll also provide details on the kiosk they want to build and possibly cost parameters.
The RFP will certainly provide a list of questions that each company interested in building the kiosk must answer. These could include prior experience, sample timelines, company processes, team members, and other pertinent information.
The RFP would go out to all of those companies Agency X identified during the RFI process. It might also be picked up by companies that collect, categorize, and house RFPs so that businesses can easily search for ones pertaining to the services that they offer.
Perhaps the most important piece of information in this stage of the RFP process is the proposal. This is where a responding company will share their solution along with how it’ll be implemented.
The RFP questions are often very detailed and the answers will provide a thorough look at the interested companies. This will allow Agency X to have an “apples to apples” comparison of potential companies to work with.
What About an RFQ?
A Request for Quotation (RFQ), also known as an Invitation For Bid (IFB), is similar to an RFP but with one key difference.
Where an RFP says “Tell us your solution,” an RFQ says “Thanks for telling us your solution.” It’s a huge difference in just a few words.
If Agency X were to issue an RFQ for their kiosk they would tell the recipients exactly what they wanted. How it should look, how it should work, what it should display, etc.
The RFQ or IFB will often seek granular level details on things like payment terms and contract lengths. These are key pieces of information particularly for government agencies who need to work with strict budgetary considerations.
A business’s response to the RFQ then will tell Agency X exactly how that business will implement the kiosk and what the cost will be. So an RFQ is really about cost sharing.
What Is a Tender?
Let’s say Agency X didn’t want a kiosk but instead wanted some fancy notepads with their name and phone number on them. Instead of an RFP, they could just place their need “out to tender.”
Tender bids are used for work, goods, or services that have a lower cost. You may also hear these referenced as RFTs or Request for Tenders.
RFTs are typically found in government work. They’re most often used when there’s a well-defined need, such as the notepads Agency X wants.
For a company to receive an RFT they typically have to subscribe to a tender clearinghouse. These are locations, now websites, where RFTs are posted for the business community to search through.
The RFP Process Is a Team Effort
The RFP process can feel like you’re navigating a labyrinth. After all, there are a number of steps and each one seems to have its own series of requirements. Don’t let panic set in. With a calm head and a strong team, you can successfully complete an RFP.
That’s right, we said team. RFPs are often created because a project has a certain degree of complexity.
No one will have all of the answers, so you should create a team where each member is able to contribute. Doing this will save time and ensure consistency in your response.
Your team should have one member from each department that the work in the RFP will affect. Each member should be responsible for gathering specific details.
Regular team meetings can help keep everyone on track. They can also help you get in front of any problems before the deadline for a response passes.
One Last Thing
A final tip we saved for the end because it’s often the last task to be completed and the one that causes the most stress. Don’t forget about case studies.
Any good client will want to know about the experience of your company at any stage of the RFP process. Many companies provide this through the use of case studies.
This tends to be the one item where people say, “I can get to that later,” and then later comes and goes. Enter your case studies as part of your proposal timeline and you’ll have an easier sprint to the finish.
Have any additional questions about the RFP process? Get in touch with us. We’re here to help.