Last week we shared information on Requests For Quotation (RFQ). This week, we want to share information on Requests for Proposal (RFP’s). Many businesses tend to use the terms interchangeably. Technically, the difference is that an RFQ is asking to specify how much will be charged to perform a task and an RFP is asking to specify how to solve the problem, and how much would charge for implementing a specific solution. While some may not agree, I believe the RFQ and RFP processes make sound business sense for businesses of ALL sizes.
A request for proposal (RFP) is a bit more complicated. Many will suggest that they are useful where there is a business need or problem and there is no standard item that will fit the bill. The client will typically know the need, but is looking for potential solutions from potential suppliers. They aren’t just looking for the lowest price, although that’s always a factor. In my opinion, I would lean toward RFP’s where possible. The advantages of the RFP over the RFP is that there is the potential to gain insights and solutions to your need(s) that might otherwise have been missed or overlooked. The RFP process tends to jockey back and forth a bit, but the reason for that should be access to creative ideas and information, not just price.
For larger organizations there are procedures and a formal solicitation and selection process. For smaller businesses, and smaller projects these processes would be scaled down. Here are some examples to provide clarity.
1. Can a template be used? For smaller businesses and projects a template is acceptable for non-governmental or non-profit engagements. (See the RFQ tip sheet above for some ideas). For larger organizations and governmental, templates should be avoided.
2. Is a public notice required? Again, not necessary for smaller businesses and projects but for larger organizations a public notice of solicitation should take place.
3. Is a pre-proposal meeting necessary? For smaller businesses this is not required unless dealing with a governmental agency. For larger organizations this may be required or optional.
The RFP process is the cornerstone of best value procurement used by large corporations. I contend that there are opportunities for small business to engage and to reap the benefits of this big scale practice on a scale that is size appropriate for small business so that they too can have access to the benefits of quality, service, solutions, and price are valuable in the small business space and likely needed there most.