A request for proposal 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.
An RFP is used where the request requires technical expertise, specialized capability, or where the product or service being requested does not yet exist, and the proposal may require research and development to create whatever is being requested. The RFP presents preliminary requirements for the commodity or service, and may dictate to varying degrees the exact structure and format of the supplier’s response. Effective RFPs typically reflect the strategy and short/long-term business objectives, providing detailed insight
upon which suppliers will be able to offer a matching perspective.
Similar requests include a request for quotation, whereby the customer may simply be looking for a price quote, and a request for information, where the customer needs more information from vendors before submitting an RFP. An RFI is typically followed by an RFP or RFQ.
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