How would you like to grow your business or do business with a government agency? There’s no question that if you land a large corporate client or government agency, it will mean a huge project and a lot of revenue.
In order to land one of those contracts, you have to be prepared to fill out a request for proposal. But what is a request for proposal?
It’s a lengthy document that companies request to find a vendor for products or services. If you want to fill one out for the government, be prepared to respond to 116 pages.
The RFP process is long and very intimidating. That’s why you want to make sure you have a firm understanding of what the RFP process entails.
Keep reading to learn what the process is and how you can create RFP responses that get attention
What Is a Request for Proposal?
It’s easy to say that an RFP is a document that companies and public agencies use to get bids on large scale projects.
As long and painful the process is for both sides, the RFP actually makes the selection process easier.
Companies and agencies that are looking for proposals can easily find the right vendor. They don’t need to conduct research or spend time shopping and calling around. The vendors who are interested apply through an RFP.
For businesses, they have the opportunity to bid on the right projects. They can review the RFP and decide if it’s worth the time and effort to fill out the RFP and meet vendor expectations.
Creating a Request for Proposal
If you’re looking at the RFP from the perspective of the vendor, you’re going to have a much different view of RFPs. That’s because it’s your job to create the RFP in a way that will solve your problem.
For example, you have a local government that needs a playground built in your municipality. As a public agency, you have a lot of stakeholders involved from voters, residents, and government officials, police, and more.
Your RFP process needs to be completely transparent. You’d run the risk of being accused of kickbacks or showing preferential treatment to the winner of the contract.
Large corporations have to be accountable to many stakeholders as well and show transparency.
The Process to Create an RFP
The process to create an RFP is part of the procurement process. This is a typical process an organization will go through to procure the services of another business.
Gather Your Stakeholders
There are a lot of people in your organization who want to have a say in your project. You will want to start off by getting the stakeholders together.
You’ll need to make a list of each stakeholder’s needs. For example, if you need someone to fulfill a large IT infrastructure project, you’ll need to have those impacted by the project to list out their needs.
From there, you can set out the goals of the project, the budget, and prioritize the needs of each department.
You’ll want to find out what the return on investment of the project will be. This will be crucial for the next step.
Get Approval First
Before you spend time writing out the RFP, you’ll need to get budget approval. You may have to take this to your manager or the CFO of your organization.
To give your project the best chance of approval, you need to be able to sell it to the executive team. It’s up to you to communicate why this project is necessary, why the budget is so high, and what the impact on the company will be.
You should be able to show that there will be a return on investment, which will help the executive team see that the project has value to the organization and increase your chances for approval.
Write Up the RFP
Once you get the OK to move ahead, you’ll need to write up the RFP. Get your stakeholders together again, review the needs and the budget.
You’ll want to come up with a list of questions and information you want from a vendor. If you’re stuck, look at other RFPs for ideas. You can draw from what your organization has done in the past or look online for tips.
This needs to be written in a way that’s compelling and generates responses from potential vendors. Expect this to take a few rounds of edits as people within the organization will have feedback before the RFP is public.
Once the RFP is finalized, you can make the RFP available to the public.
Hold a Q&A
For larger projects, you’re going to have a lot of questions from potential bidders. Rather than answering them one at a time, hold a public Q&A for vendors.
This can be done in person or through a teleconference. This step will save you a lot of time and give vendors the opportunity to ask questions before they respond.
Manage the Responses
After a few weeks, you’ll start to get your RFP responses. You can start to review the bids as they come in or wait until the deadline to submit an RFP has passed.
You’ll need to have a way for everyone to review and make notes on each proposal. The easiest way to do that is to use proposal software.
Select the Vendor
Once you and your team have reviewed the response, you can narrow down your selection to a few vendors.
You may have additional information to request from them. You may have each vendor come in and make a presentation to all of the stakeholders.
You can then select the vendor, negotiate the final contract, and then move forward with the project. The vendor will provide the services as agreed upon.
Your job is to manage the project and ensure that the vendor is paid on time per the terms of the contract.
Responding to an RFP
What does a request for proposal look like from the side of the vendor? These are the steps a vendor would take to win an RFP.
Get Your Response Team Together
The first thing you want to do is decide whether or not the RFP is worth responding to. You’re going to invest time and money to create a response, and RFPs typically have a low win rate.
You also want to assess if you’ll get paid what you’re worth for the work. For example, if you’re a marketing agency that usually gets paid $200 an hour for your work, you want to make sure the RFP covers those costs.
You may find that the work involved is very involved and you’ll wind up getting paid half of what you normally do. That’s not worth responding to.
If you decide that the RFP is worthwhile, then get a team together to develop your response.
Read the Whole Proposal
Everyone on your team needs to read through the proposal a few times. They need to take notes, draft ideas as to how you can respond, and write down any questions.
Well-written RFPs have all of the information you need to respond, including selection criteria. The selection criteria prioritize certain aspects of vendors.
A vendor’s experience may be the most important criterion, or the price may be the most important. Once you know how your RFP will be judged, your response can focus on the most important areas.
Price the Project
Pricing the project is a challenge when you’re working with large-scale projects. There are so many variables that impact the final cost, it can be hard to give a specific number.
You want to price in a way that’s profitable for your business. You also have to make it appealing to the vendor.
When you do develop a price, give a ballpark figure. It’s also important to note all of the assumptions you made in creating your price and how changes to the project will impact the final cost.
Show Off Your Experience
Your experience does matter to companies. In your RFP response, you’ll want to show that you have experience performing the job at hand.
Brag about how long you’ve been in business, similar projects, and include testimonials from past clients.
The Request for Proposal Explained
What is a request for proposal? The request for proposal is a type of mystery in the business world, but it doesn’t have to be.
An RFP is a document for vendors to easily find vendors to bid on large-scale projects. For businesses, an RFP enables them to find the jobs that they know they can fulfill and be profitable.
The request for proposal process is long since there are many decision-makers and stakeholders involved. Whether you’re a vendor or responding to a vendor’s RFP, you want to get your stakeholders together early in the process.
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