Request for Proposal (RFP): What It Is and How It Works

What is an RFP?

A request for proposal (RFP) is a formal document issued by an organization—public or private—to announce a project and invite qualified vendors or contractors to submit bids. RFPs describe the project goals, scope, deliverables, and the criteria and process the issuer will use to evaluate proposals.

When to use an RFP

Use an RFP for projects that are complex, involve multiple stakeholders or subcontractors, or where the issuer wants to solicit creative solutions and compare competing approaches. Typical scenarios include system implementations, large construction or infrastructure work, consulting engagements, and multi-vendor service procurements.

Core components of an RFP

A well-structured RFP typically includes:
* Project overview and background: who is issuing the RFP and why.
* Statement of work (SoW): specific tasks, responsibilities, and expected outcomes.
* Deliverables and timeline: milestones, deadlines, and acceptance criteria.
* Budget or funding expectations (if applicable).
* Proposal format and submission instructions: required sections, supporting documents, and how to submit.
* Evaluation criteria and scoring methodology: how proposals will be judged.
* Contract terms and conditions: legal, compliance, and insurance requirements.
* Questions/clarifications process and timeline.
* Contact information and deadlines.

RFP process (typical steps)

1. Define objectives and draft the RFP.
2. Issue the RFP and open a period for questions.
3. Receive and log proposals by the submission deadline.
4. Screen submissions for compliance with requirements.
5. Evaluate proposals against stated criteria and score them.
6. Shortlist finalists; conduct interviews, demos, or site visits as needed.
7. Negotiate price and technical terms (may request best-and-final-offer).
8. Award contract and onboard the selected vendor.

Benefits

• Promotes competition and transparency, which can lower costs and reduce bias.
• Encourages multiple approaches and innovation from vendors.
• Provides a standardized way to compare offers by requiring a uniform proposal format.
• Useful for sourcing specialized skills or capacity not available in-house.

Drawbacks

• Preparing and responding to RFPs can be time-consuming and resource-intensive.
• Complex RFPs may deter smaller or more innovative vendors from participating.
• If poorly written, an RFP can be either too vague (leading to unsuitable proposals) or too prescriptive (stifling creativity).
• Vendors may not always submit their best price if they can infer the level of competition.

RFP vs RFQ vs RFI

• RFP (Request for Proposal): Solicits proposals to solve a problem or complete a project; allows for creative solutions and evaluation beyond price.
• RFQ (Request for Quote): Requests specific prices and terms for clearly defined products or services—used when requirements are known.
• RFI (Request for Information): Seeks general information about suppliers, capabilities, or products to inform future procurement decisions.

How to write an effective RFP

• Be clear about objectives and what success looks like.
• Provide enough detail for vendors to produce comparable proposals, but allow room for innovation.
• Define evaluation criteria and weighting up front.
• Standardize the required proposal format to simplify comparison.
• Include realistic timelines and a clear Q&A process.
• Consider scalability and how smaller vendors might respond—remove unnecessary barriers.

How vendors should respond

• Follow the requested format exactly.
• Address the evaluation criteria directly and provide evidence (case studies, references, financials).
• Demonstrate understanding of the issuer’s goals and offer a clear, realistic work plan and timeline.
• Be transparent about assumptions, risks, and pricing structure.

What happens after an award

After selecting a winner, the issuer typically finalizes contract negotiations, agrees on deliverables and milestones, and begins project kickoff and vendor onboarding. Ongoing governance should be defined in the contract to manage performance and changes.

Key takeaways

• An RFP is a formal method for procuring solutions where competition and comparison of approaches matter.
• The success of an RFP depends on clear objectives, balanced requirements, and transparent evaluation criteria.
• Use RFPs when you need more than a simple price quote—when you need expertise, creativity, or a comprehensive solution.