How to Choose The Right System – The RFP Process

Here’s a step-by-step guide, along with some tips to give you a good grip on the process.A request for proposal is generated to invite bids and proposals from vendors, for the purchase of assets or for awarding work contracts. This formalized procedure helps in generating competitive proposals, from amongst which the final choice can be made.

Step #1 – Gathering the Requirements

The process of preparing a Request for Proposal (RFP) begins with gathering requirements of the project.  It is better to have template in the sheet (xl/xls format) with several columns, such mandatory or not, part of scope or not, out of the box or not, etc. for easy evaluation so can be easy sort based on various criteria.

Step #2 – Establish Vendor Eligibility

Once you know what the demands of the project are, the next important step is to setup a vendor eligibility criterion. You’ll need to set up some minimum eligibility criteria that will be used to scan and shortlist the vendors. Also, you must clearly specify the additional factors that will get the vendors some added preference

Step #3 – How to invite the Vendors?

You have two options when it comes to invite the vendors, you can either place an advertisement to invite the vendors to submit the proposals or you may only invite the vendors to submit the proposal from a selected list of vendors by contacting them directly. Thus from here the RPF process will vary depending on the choice made. If you’re inviting proposals through advertisement, you can skip the next three steps and move straight on to step #7.

Step #4 – Browse Existing Vendor Database

Every organization maintains some sort of vendor database, and if your organization too has one then that’s the place to begin your vendor search.

Step #5 – Research New Vendors

The list of vendors from your internal database may not be enough. Look up newspapers, Internet, trade journals and business directories to search, ask your friends / colleagues identify and add more vendors to your list.

Step #6 – Scan and Shrink Your List of Vendors

Make a tentative list of potential vendors after scrutinizing each vendor against the eligibility criteria. This is not the final list of vendors, as the final list can be prepared only after internal stakeholders have approved it.

Step #7 – Create a Vendor Evaluation Plan

You need a detailed plan that will be used for evaluating and selecting the vendor. This plan should include the procedure to be followed, evaluation criteria and details about the decision makers. This vendor evaluation plan must be fair and open as it will be beneficial for auditing purposes later.

Step #8 – Draft a Request for Proposal

Here is a brief description for each and any of the common sections of your RFP: statement of purposes, background information, scope of work, deliverables, term of contract, payment term (Payments, Incentives, and Penalties), contractual terms and conditions, how to response (response proposal format from the vendor), evaluation process, time-line, contact person.

Step #9 – Invite Suggestions and Comments on the Draft

The draft that has been prepared in the last step is not the final one. Before we make the final document, the draft must be distributed to all relevant internal stakeholders to generate their comments and suggestions. If you generated a list of vendors in step # 6, this list should also be attached with the draft.

Step #10 – Prepare the Final Document

After making adjustments to the request for proposal draft, by accommodating the inputs received during the above step, the final RFP is on the go.

Step #11 – Send Out the RFP

Once you have the final copy of the RFP document, you need to send it out to the vendors using the preferred media. If you’re requesting proposals from vendors on your list, you can send them the document as a hard copy or in an electronic form. And when requesting proposals in public, the RFP can be placed as an advertisement in some print media such as newspapers.

Step #12 – Receive Proposals

When you receive related proposals form responded vendors (based on advertisement or invitation), organize and file them accordingly for easy scanning during the evaluation.

Step #13 – Evaluate the Proposals

Evaluate all the received proposals and choose the winning vendor. For the evaluation you’ll have to follow the procedure outlined in the vendor evaluation plan that you had prepared earlier.

Step #14 – Award the Contract

Once you reach a unanimous decision on who is the most appropriate vendor, the contract can be awarded to the winner. It is a good practice to request the vendor to sign-off the RFP as part of the commitment that when vendor complies with the requirement and it means truly comply. Remember, ensure all are being documented properly; the evaluation process, the criterion, the reason why one vendor is not selected and one vendor is selected and it is must based o the evaluation criteria.

Step #15 – Prepare a Contract/Work Order Form

A work order form (contract) details out the exact requirements – including qualitative as well as quantitative requirements, list of deliverables and the detailed schedule. As a tip, if vendor signs-off the RFP response, you can make that sign-off RFP response as part of the work order (contract) so it will save time as well. The work order can be act as an abridged version of requirement specification document and the good thing if the Vendor has signed off the RFP, you can use it also as requirement specification documentation.

Cheers.