A Request for a Proposal (RFP) can be applied to all manner of projects, large and small. It is also incredibly useful for finding out exactly what a contractor or outside services supplier will offer you for a given job, as well as formalising your relationship with them, laying the ground rules and defining and agreeing costs.
Outside companies read the RFP and write a proposal, or a bid, explaining how they can meet your requirements for the project. Comparing all the bids side to side will then enable you to select your preferred supplier.
Many public sector and government agencies have set requirements and standards for their RFPs. The reason for this is that they can ensure they have covered all the angles, and that there is a written documentation of what is expected, for the sake of both sides. It also ensures uniformity and accountability across projects. RFP documents can run in size from a single sheet to a small book.
Many small and mid-sized businesses, on the other hand, may not have a formal RFP requirement, but it is worth having a formal structure, for the reasons described above. Here are some guidelines on what may be useful to include in an RFP.
This is a summary of the entire proposal, written in plain business English and explaining the work that is required.
This section will contain a brief introduction to your business and your business processes, and the current issue for which the RFP is being raised. It will also spell out what you intend to achieve in terms of short or long-term business goals.
It might be a good idea to mention the benefits that project completion will bring to the company, and perhaps your supplier evaluation and selection processes.
You could also mention in this Executive Summary your selection parameters, which might include the time it takes to carry out the project, the price, flexibility, and requirements for innovation.
These terms will, of course, vary from project to project, so an IT migration will differ from an implementation, a pilot trial of particular hardware, and so on.
Statement of Need
The Statement of Need, also termed the Requirements Section, is likely to be the largest part of the RFP, taking up to two thirds of the information in the document.
This section talks about why the project is necessary and is the nub of the RFP. The statement of need clearly defines the problem, and discusses why the project needs to happen. It might also describe the positive results of a particular programme or project.
It is a good idea to be as descriptive and detailed as possible in this section because RFPs that have vague requirements often result in wasted interview time and high cost estimates to compensate for the unknown.
You are not aiming to provide solutions in this section, just lay out the issues in a logical manner. With this in mind, you might like to gather and lay out any relevant facts or statistics that will help to explain the need for the project.
Consider requesting information from the relevant departments and stakeholders in the business beforehand to assist with this.