REQUEST FOR PROPOSALS

The Request for Proposal (RFP) is a two envelope procurement method that can be used for goods, services or works. It is used when suppliers, contractors or services providers are expected to propose a specific solution (methodology and workplan) to fulfilling a specific requirement.

Firms are required to submit technical and financial proposals in two separate envelopes. The technical proposal is evaluated first and ranked according to pre-established evaluation criteria, and only the financial proposals of those firms that achieved the minimum qualifying mark (score), indicated in the RFP, are opened and evaluated.

The RFP method differs from open tendering in six fundamental aspects:

1. Proposals are submitted in two sealed envelopes,
2. At the opening event, the financial proposals are left unopened and are safeguarded,
3. Financial proposals are opened only after completion of the evaluation of technical proposals,
4. Only the financial proposals of the firms achieving the minimum qualifying mark or more are opened
5.  Selection is based on a proposed solution and not on price,
6. The sum of the combined weighted score of the technical and financial proposals determines the winning firm with which the contract is negotiated.

There are some differences in addition to the above, on the application of the request for proposals, that introduces a bit of confusion with respect to this method. As with other methods, the use of this one must strictly adhere to the stipulations of the governing procurement legal framework.

In comparing RFP and Two-Stage procurement method, Request for proposals are used primarily for hiring consulting firms. But the two-stage procurement method (technically also a request for proposal), is reserved for the procurement of goods, works and non consultant services. The procurement manuals of many countries (Kenya and Rwanda are a typical example) also follow this system of using request for proposals primarily for the selection of consulting firms.

The following are examples of the selection procedures for consulting services that use the RFP procurement method:

1. Quality and cost-based selection (QCBS)
2. Quality based selection (QBS),
3. Fixed budget selection (FBS), and
4. Least-cost selection (LCS).

In spite of all of the above, the essential characteristic of the RFP is that:

• sealed proposals (technical and financial) are received in response to the RFP,
• the technical proposals are opened and evaluated before the financial proposals are opened,
• Only the financial proposals of the firms achieving at least the stipulated minimum qualifying mark on their technical proposals, are publicly opened,
• the final score is usually the sum of the weighted score of the technical and financial proposals, and,
• the final contract is awarded based on the highest combined score rather than lowest price, except in the case of least-cost selection (the subject of a future post).