What is a Request for Proposal (RFP)?

Some government agencies issue a Request for Information (RFI) before requesting proposals. A Request for Information is a document a government might issue to gather broader information on a company. It gives an overview of the company’s capabilities, history, experience, and more.

The main difference between an RFI and an RFP is that an RFI identifies vendors that could be qualified for many different future projects, while an RFP asks companies to offer solutions for a specific problem.

Governments typically use an RFP when they have a complex problem and aren’t sure how best to solve it. If an agency knows the exact solution they need, they may issue a Request for Quotation (RFQ) instead. An RFQ is often used to get price quotes and timelines on getting a particular product.

For example, if a government agency wants to create a computer lab in a local library, it may issue a request for information to see what products and services various companies can offer.

It may issue a Request for Proposal to consider the best approach for the entire project, including how to set up the computer lab, which types of hardware and software to use, etc.

But if the government wants to buy 30 desktop computers, it may simply issue a request for quotation to compare price points.

The purpose of a government request for proposal is to help find the best solution for a complex problem.

RFPs can be especially helpful when a government agency needs an integrated solution involving components from various suppliers.

Why is the RFP process important?

RFPs help government agencies make more informed buying decisions by allowing them to compare many different bids. Rather than just seeing one solution, RFPs show many different ways of approaching a problem. This can highlight solutions that are more comprehensive and sustainable.

For example, if a government agency wants to transition to a paperless system, they will need a new, integrated system. This will include software, hardware, training, and maintenance. Issuing an RFP can help find a vendor that can develop a plan to implement a system customized to fit the agency’s needs.

The RFP process also helps increase transparency in local government. Requests for proposals show citizens how the government is spending taxpayer money. Government RFPs also broaden the vendor pool.

They level the playing field by requiring all potential vendors to submit proposals—whether or not they have worked with the government before.

This increases the likelihood of finding the best product and reduces opportunities for corruption or back-channel dealings.

Is an RFP required for local government?

Local governments typically have some form of a mandated procurement process for contracts. Some states or cities require government agencies to issue requests for proposals for certain projects.

But RFPs are not always required. Some governments may find providers who have been vetted by an agency such as the General Services Administration.

It’s really up to the state or locality to determine their procurement requirements.

In some cases, there may only be one vendor who can provide the particular service the government agency needs. This would justify skipping the RFP process and opting for a sole source procurement instead.

However, in most cases, issuing an RFP can be the best way to allow for fair competition and find the best solution.

So what might a Request for Proposal process look like?

Let’s look at the process for the example above, where a government agency wants to go paperless.

First, agency leaders will need to talk through their specific needs and draft an RFP. These officials may gather feedback from bidders on what the RFP should include—what do vendors need to know in order to create a relevant proposal?

From there, the agency will issue a finalized RFP along with a deadline for vendors to submit bids. The agency may establish a commission to review the proposals and choose a few vendors with which to negotiate further.

The commission may invite those few vendors to submit final offers and establish a contract with the vendor whose proposal best meets the needs of the project.

As detailed above, the Request for Proposal process can be incredibly helpful if done well.

A well-written RFP elicits detailed proposals and helps jumpstart a project. But a badly written RFP can be a roadblock, producing bids that don’t address the actual problems or discouraging good vendors from bidding.

Here are some best practices for writing a Request for Proposal:

Ask open-ended questions

Too often, the RFP is written with the end in mind. In these cases, the RFP may include an extensive list of required features and questions that cause some vendors to disqualify themselves before they even apply.

On the other hand, some RFPs are so vague that vendors can’t figure out what the government agency is actually asking for.

In choosing which questions to ask in the RFP process, government agencies need to distinguish between their needs and wants for the project. What is the overall goal of the project?

Does the project have to meet certain accreditation standards or security measures? Is there a certain date the project must be completed or fully implemented?

Some of these will require straightforward, yes or no questions. But in other areas, open-ended questions can give government officials a better feel for what it would be like to work with the vendor, and give vendors room to offer creative solutions.

Along with a few industry-specific questions, government agencies should consider asking about product trials and warranties, a vendor’s competitors, additional fees, and customer service.