What is a Request for Proposal?

A Request for Proposal is a document issued by companies or organizations inviting qualified vendors (or service providers) to bid for an available project or program.

How a Request for Proposal Works

The organization or the company announces that a fund is available for said project or program and companies may bid for it. The document generally includes information about the issuing organization and their work, timeline, budget and specification of the proposed project, contract terms and possible formatting of the requested proposal. It also may include the desired skills and evaluation criteria for the received bids. The organizations and companies issue a request for proposals to get work done by an outside contractor or vendor. 

After receiving bids from different contractors, the organization sorts out those proposals considering the feasibility of each. The organization may also look into the background and skills of the bidder to estimate their ability to complete the project accurately. Proposals from various bidders provide different perspectives which help the organization to select the most appropriate one. The bidders are also asked to provide their price quotation for the proposed project. A request for proposal needs to be written accurately and clearly. It should clearly communicate all of the requirements of the project. It should also mention the desired result and an expected timeframe for completion. The vendors can formulate a clear and to-the-point proposal only when the project requirement is clear to them. 

On the other hand, if the request for proposal becomes too detailed and restrictive the vendor might not be able to showcase their innovative ideas. A proper balance needs to be maintained while creating a request for proposal. The issuing organization drafts a request of proposal and invites the bidders for reviewing the draft. Then the organization edits the draft based on the feedback received from the vendors and issues the final document inviting proposals. After receiving proposals based on the request, the organization selects a few of them and starts negotiating the price and other technical issues before selecting the vendor best suited for the job. The organization may also invite a final round of bidding from all the bidders before finalizing the contract.