A “Request For Proposal” is the issue of an invitation for suppliers to submit a proposal on specific goods or services. The RFP process brings structure to the procurement decision and allows the risks and benefits to be identified clearly upfront.
Searches on the web will also show a number of opinions that are against the use of RFPs. It seem that these opinions have come about due to a lack of correct process – RFPs being used in a scatter gun fashion soliciting responses from random suppliers.
RFPs are a structured document and should only be sent to suppliers that are already interested in providing a “proposal” to supply goods or services at an agreed quality, schedule and price.
The major benefit of the RFP (if done properly) is that it ensures all potential suppliers receive exactly the same information to base their costs and performance on, no single supplier or group of suppliers receives preferential treatment – accidental or otherwise.
Plus, if the format of the responses has been specified, comparison of the submissions can made easier, quicker and directly. In fact, if actual historical data (desensitised) has been used throughout, it will not only allow comparison of potential suppliers but also allow current costs to be used as a benchmark.
Even so, it is critical RFPs are accurate, clear and concise. Shortcuts, errors or omissions will impact on the final selection, exactly as if an RFP had not been used at all – and a wrong decision can be very costly.
Contact me if you’d like to know more.