Dictionary
Debitoor's accounting dictionary
Request for proposal (RFP)

Request for Proposal (RFP) - What is a request for proposal?

A request for proposal is a document which outlines a project. It is used by large companies and government organisations to request business proposals from potential suppliers and partners.

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A request for proposal is used to request specialised capabilities or technical work for new projects. The RFP is sent to several suppliers or businesses to compete for the project.

What does a request for proposal include?

An RFP includes several detailed items and requests beyond just the price. A request for proposal requests information about the potential suppliers history, technical processes, estimated time of completion, and occasionally, references.

The request for proposal outlines a specific project a company is trying to accomplish, and asks suppliers to give detailed information on how they will complete the project, what resources they have available, how quickly they can complete the project, and previous experience in that field.

Suppliers or businesses then create a business proposal tailored to the company’s requests, and sends it back to them. The company will then decide which supplier or business has the best proposal and choose them to complete the project.

What is the difference between a request for proposal and a request for solution?

Although both requests are similar, a request for solution is more general and open ended.

A request for solution is a document requesting a solution for a situation or demand from a company or organisation. It is more flexible than a request for proposal as it doesn’t exactly list the requirements, and asks potential suppliers or businesses for their own tailored solution to a situation.

It allows the potential supplier or business to be innovative and come up with their own solution rather than explaining how they can complete the company's proposed solution.

How do I answer a request for proposal?

The goal to securing the job is to convince the potential client that your company can complete the project better than other businesses or suppliers.

Firstly, read the RFP carefully and understand exactly what services are being requested. Think about how your company can contribute to their request.

It is important to be realistic in what your company can offer. If you say you can do something, you must be able to deliver. Although it may be tempting to provide improbable solutions to secure the agreement, it will cause you headaches when it comes time to do the work.

If possible, offer multiple solutions and proposals that your business can provide. This will let the client know that you are open to changes and any unexpected circumstances that may come up during the project.

It is also important to think about how your competition will respond to the request. There are likely several suppliers or businesses responding to the request for proposal. Make yours unique, to the point, and highlight your strengths as a company.

Present a reasonable time frame and introduce some key team members and provide information on how they will conquer the task. This will give a personalised reflection of how your team has the experience and training to thrive.

Give some references even if they don’t specifically ask for them. A reference from a similar project can certainly give your company a leg up as it shows how well a previous business relationships has worked, and how you completed other projects in a timely manner and exceeded expectations.

Always provide as much detailed information as you can. Avoid being vague, and be as professional as possible to convey that your business is up for the task!