A request for proposal (RFP) is generally used for complex projects, it helps specify the nature of the project and discloses the evaluation criteria for proposals to select the best IT company for the job. It serves as a project funding announcement by a business or organisation and from there IT companies can place bids to complete the project. An RFP is normally sent to a handful of outsourcing companies shortlisted as potential candidates for the particular project. An RFP makes it easier to create long-term business relationships where both parties can meet each other’s expectations.
The document provides a detailed description of the project’s requirements and expectations, and outlines the bidding process as well as the contract terms and conditions. It is tailored specifically to the organisation’s needs and is crucial in ensuring the future efficiency of businesses. It is important to achieve balance: the proposal should not be so detailed that it limits the creative freedom of possible contractors, nor so vague that bidders are confused as to how they should approach the project.
The more effective the RFP is in providing necessary details, the more likely a suitable IT company will be chosen that meets the goals of the organisation. The benefit of putting out an RFP is getting multiple bids which allows the organisation to make an informed decision.
The process will normally begin by drafting a RFP. During the drafting process the organisation should consider their goals, what is necessary and what is possible to achieve. The selected bidders will then review the draft and provide feedback for improvements. After implementing these suggestions, the final RFP is posted. The organisation then negotiates with bidders on prices and the details of the tasks. The organisation may then ask bidders to submit their best offer before awarding a contract to the IT company they deem most suitable.
It is important to consider the status of the company and the ability of the bidder to be able to do what they propose when reviewing bids. When deciding on the winner, the organisation should look at the strengths and weaknesses of various proposals and evaluate which of these compare best with their own values — for example whether they would prioritise lowest cost, fastest production or highest quality.
It is worth including in the RFP a description of the tasks that are to be performed by the winning bidder and a timeline or set of deadlines they should follow. The RFP should also include information helpful to the bidder about the organisation and how it conducts its business. It should also guide bidders on how to respond to the proposal by stating which information they are to provide.
The document should be divided into sections such as:
The introduction will explain why the organisation is publishing the RFP and what they hope to achieve through it. It may also provide a summary of key points from other sections, such as the due date for bids.
The requirements section will specify to the prospective IT companies what the organisation is looking to achieve — for example what type of systems they want software to be written for (bespoke software, systems integration, mobile app, reporting software etc).
The selection criteria will explain how the winning bid is chosen (for example by the cheapest price or fastest promised delivery time).
The timelines will provide a set of deadlines to prospective contractors and provide a guideline for how long processes are expected to take. The processes section will explain how the collaboration process will go, between first sending out the RFP, awarding the contract and beginning the work.