Creating Requests for Proposals

A request for proposal (RFP) is an event that collects both information about suppliers' qualifications as well as pricing information.

It serves to gather competitive market and pricing information by specifying what the customer is looking for and describes each evaluation criterion on which a vendor's proposal will be assessed.

Although pricing information can be collected, price might not be the most important factor in the selection.

RFPs can be helpful when:

• Obtaining first-round pricing in preparation for an auction and help eliminate non-competitive suppliers.

• Sourcing non-standard items.

  • The RFP allows for additional information gathering and facilitates easier comparisons of non-standard products such as software or cleaning services.

• Comparing a variety of possible options.

  • Project owners can add terms to address all negotiable aspects of a certain deal (e.g. contract terms and specifications), and easily compare different proposals.

  • In closed RFPs, suppliers can respond without fear of revealing anything to competitors, since the information will be seen only by the project owner and team members.

• Allowing suppliers to differentiate themselves through bidding process by highlighting their:

  • Product differences - If the project owner is sourcing a non-standard product or service, suppliers can include information about why their product/service is superior.

  • Services offered/provided - Project owners can request for information about associated services offered by suppliers related to the RFP, where suppliers can upsell or market additional services or goods.

Project owners control how much information suppliers can view about other suppliers’ bids, which affects the level of competitiveness of the event.

What is a Closed RFP?

If the rules do not allow suppliers to see any bid information from other suppliers, the RFP is called a closed RFP. In closed RFPs, suppliers will typically submit a single bid, but can change and resubmit their bid if desired.

Common uses for Closed RFPs:

• Obtaining first round pricing, or if there are not enough suppliers to drive competitive bidding

• Can be used as qualifying round to narrow the supply base in preparation for an auction

• Gather competitive market information without revealing feedback to suppliers

What is a Competitive RFP?

If the rules allow suppliers to see information such as the lead bid or the supplier’s own rank in an event, then the RFP is considered competitive, and suppliers will usually bid multiple times, trying to out-bid their competitors to win the business.

Common uses for Competitive RFPs:

• Suppliers see competitive information (rank and/or price) in real time and submit multiple bids to out-bid their competitors

• Differs from an auction since the focus is not just on collecting final pricing

RFPs can be open for responses for an arbitrary amount of time (several days or weeks), allowing participants to log in and respond at their convenience.

The timing rules can be modified by project owners as needed before the event is published, and adjusted by event administrator team members after publish.

If a project owner wants to solicit pricing or other information for a large number of items (more than 2,000 items), they can create a large-capacity RFP.

Large-capacity RFPs are non-competitive RFPs that can contain up to 10,000 line items.

Contents for large-capacity RFPs are accessed using Microsoft Excel spreadsheets and are not directly visible in the user interface.

If an RFP contains many questions, the grading and scoring feature can be used to rate the importance of questions and pricing and grade participants’ answers to create a final score for each participant.