A Request for Proposal (RFP) is a business document that announces a project, describes it, and solicits bids from qualified contractors to complete it. It is often used by an agency or company interested in procurement of a commodity, service, or valuable asset, to potential suppliers to submit business proposals. An RFP is used where the request requires technical expertise, specialized capability, or where the product or service being requested does not yet exist, and the proposal may require research and development to create whatever is being requested.
An RFP typically includes background on the issuing organization and its lines of business, a set of specifications that describe the sought-after solution, and evaluation criteria that disclose how proposals will be graded. The RFP presents preliminary requirements for the commodity or service, and may dictate to varying degrees the exact structure and format of the suppliers response. The RFP defines the project, for the company that issues it as well as the companies that respond to it, and describes the projects goals and the organization that is sponsoring it, outlining the bidding process and contract terms.
When using an RFP, the entity requesting the bids is responsible for evaluating the feasibility of the bids submitted, the financial health of the bidding companies, and each bidders ability to undertake the project. The RFP typically contains a section defining the scope of work or the scope of service(s) to be provided, discussing the tasks to be performed by the winning bidder and a timeline for providing deliverables.
Similar requests include a request for quotation (RFQ), whereby the customer may simply be looking for a price quote, and a request for information (RFI), which is used when the customer wants to gather information about potential suppliers without committing to a purchase.
