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15
Sep

RFP Question: Top Questions About The RFP

The RFP or “Request For Proposal” is an increasingly important part of conducting business in the “new normal” and as we enter a more technological and connected world online. Many governments use only the RFP process in order to determine which vendors and service providers will be granted government contracts.

The RFP process is also becoming increasingly common in the Private Sector. If there is a downside it is that many in the private sector industry do not actively shop their RFP and will only post it in a very limited capacity. It is more challenging to find these, but there are many gems hidden here if you are willing to do some digging to find them.

What Is An RFP?

The first step is understanding what an RFP is and how it works

The RFP or Request For Proposal is the means by which a company, government, or other agency, can determine those vendors, service providers, and producers which are best suited to deliver products or services that are necessary. By requesting proposals, the issuer provides the vendor with an opportunity to make their company and their product or service stand above the rest.

A disturbingly large number of private sector RFPs are poorly written according to some reports. Understanding the RFP and what it is, inclusive of the individual RFP components, can help to determine in large part, whether or not the RFP is worthy of a full proposal. The term “Go/No-Go Decision Making Process” refers to the processing or parsing of the RFP and determining whether or not it is worthy of pursuit.

What Are The Parts Of An RFP?

Each RFP will be unique to some degree. Variations may occur in the titles, sections, and even the verbiage used within the RFP. Sometimes there will be a set format for the proposal response, though this is rarely the case. There will be certain parameters included as a rule, however, and these need to be carefully noted by the proposal team.

Key Components of any RFP Include:

  • Issuer Description
  • Project Description
  • Scope of Proposal
  • Compliance and Requirements
  • Bidding Process and Contract Terms
  • Proposal Evaluation Process

What Is RFP Compliance and Why Is It Important?

There is often a section that includes very specific formatting requirements for the proposal response. This helps the company issuing the RFP to determine which of the vendors may have issues following simple or even complex instructions, and is often one of the first considerations for any written proposal in response to an RFP. This is only part of the compliance process.

The Compliance portion of the RFP may also include any special licensing or other parameters required by the issuer. These requirements will be limited as a rule, to those licenses and other demands relevant to the task or production involved, but may vary also depending on the needs of the issuing party.

What Are The Risks Of Responding To An RFP?

It is common for individuals and small businesses to respond to any relevant RFP that they find. While this sense of urgency and hope is to be lauded in some aspects, it is not always in the best interest of the individual or the company.

There are many different aspects of the Go/No-Go decision making process. These considerations are among the most important when determining whether or not there is a viable chance of winning the bid. There are also factors that need to be carefully determined in the event that winning the bid is a likely possibility.

The Costs Of Proposal Writing Are The Responsibility of the Vendor

Any costs that are incurred for the proposal writing process are the sole responsibility of the proposal writer or vendor responding to the RFP. This is not a cost that can be “added on” as an additional expense for the issuer of the RFP but one that must be budgeted in to the company responding.

There is an old adage that reminds us we must “pay to play” but this factor should be carefully considered before you determine whether or not the RFP is worth the necessary costs of writing the proposal.

The RFP Response May Become Part of the Contract

The idea of responding to an RFP even if there is little chance of success, can sometimes be used as little more than a marketing or branding tactic. The small business owner, seeking to get their name out there, may respond to an RFP and not believe for one moment that they have any chance of winning the bid.

And then the unthinkable happens. And then they win the bid.

The business proposal written in response to an RFP will likely become an integral and legally binding part of the final contract. There will not be any opportunity for the respondent to make any additional claims, edits, or other adjustments.

The lowest bid does not always win, though occasionally it will. If you have underbid the contract that could prove worse than not bidding at all. If there are added costs, the company who wrote the winning bid proposal will be solely and legally responsible for bearing those costs.

If promises have been made in the business proposal that cannot be kept, it may very well end up becoming a legal breach of contract. This can result in the company writing the business proposal being thoroughly bankrupted and the owner left unable to bid or win additional contracts, even if they do manage to rebuild.

So how do you ensure that you are ready to write a proposal in response to an RFP? The short answer is “piece by piece”. In other words

What Is RFP Parsing And Why Is It Important?

It is a good idea to fully parse the RFP as part of the “Go/No-Go” decision-making process. Parsing the RFP allows you to determine whether or not you have a viable chance of winning the bid and gaining the added business. It also gives you the opportunity to understand what the costs will be of gaining that business and how much your company will need to invest should your proposal be accepted.

Parsing the RFP is the process of breaking every aspect down into more manageable subsets of data and information. In this way, you can independently review all of the vendor requirements. You can determine how the proposals will be evaluated and how the contract will be awarded.

You can determine whether or not there will be any added expenses for your business, and determine whether the added cost is worth the potential benefit. You can determine if you would be able to handle the bid alone if you were to win, or if you would also need to hire subcontractors to handle any portions of the bid.

Parsing the RFP is perhaps the best way to make a final decision on the Go/No-Go decision making process. Parsing the RFP should give you all of the necessary information you require to determine whether or not you can win the bid proposal contract.

Parsing the RFP should also help you to determine how profitable the business venture will be if the contract is won. It should be noted that financial gains are not the only concerns. There may also be additional benefits in terms of public relations and brand awareness.

Why The RFP Is The Future Of Business

Companies that rely on the RFP have been more selective in their responses, most notably during the global pandemic. This is opposed to the fact that the actual number of RFPs being issued has increased over the same period. In short, this means that there are more Requests for Proposal on a regular basis, while fewer vendors are likely to be competing on a haphazard basis.

The RFP by private sector companies has increased as the overall numbers of RFPs have been expanded. As more and more companies delve deeper into the need to diversify production and operations through Business Process Outsourcing or BPO, the use of the RFP will increase accordingly.

We are now entering the age of the Internet of Things and the Fourth Industrial Revolution. As these concepts take hold, Business Process Outsourcing will similarly increase. Those companies that are not capable of writing a viable proposal in response to the RFP may soon be left behind.

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