A request for proposal (RFP) is a document that solicits proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals. It is submitted early in the procurement cycle, either at the preliminary study, or procurement stage.
In principle, an RFP:
- Informs suppliers that an organization is looking to procure and encourages them to make their best effort.
- Requires the company to specify what it proposes to purchase. If the requirements analysis has been prepared properly, it can be incorporated quite easily into the Request document.
- Alerts suppliers that the selection process is competitive.
- Allows for wide distribution and response.
- Ensures that suppliers respond factually to the identified requirements.
- Is generally expected to follow a structured evaluation and selection procedure, so that an organization can demonstrate impartiality – a crucial factor in public sector procurements.