Running a Fair, Fast RFP: A Beginner-Friendly Guide to the Request for Proposal Process
A Request for Proposal (RFP) is a formal solicitation document that invites suppliers or service providers to submit proposals in response to a defined requirement. It is the primary procurement tool for complex, high-value, or non-standard purchases where price alone is not sufficient to evaluate supplier suitability.
In 2022, with supply chain volatility making it harder to find reliable suppliers, and inflation increasing the importance of getting pricing right at the point of contract award, running an effective RFP process is more consequential than in stable market conditions. Here is a guide to the essentials.
Before You Issue the RFP
Define the requirement clearly before writing the RFP. An RFP that is issued before the requirement is well-defined will receive proposals that are hard to compare and evaluate. Spend the time to document the functional requirements (what the product or service must do), the performance standards (how well it must do it), and the constraints (budget, timeline, technical compatibility, regulatory requirements) before drafting the RFP.
Conduct market engagement before the formal process. Speaking to potential suppliers before issuing the RFP helps you understand what is feasible, what pricing looks like in the current market, and how the market is likely to respond to different requirement structures. Market engagement does not compromise the fairness of the process if it is open and documented.
Determine the evaluation criteria and weightings before the RFP is issued. The evaluation framework should be established before the RFP is published, not after responses are received. Post-hoc evaluation criteria are a due process risk and produce less defensible decisions.
During the RFP Process
Set a realistic timeline. The minimum time for a well-considered proposal in a complex procurement is typically four to six weeks. Shorter timelines reduce the quality of responses and favour incumbent suppliers who already know the requirement. Longer timelines are justified for highly complex requirements.
Manage questions and clarifications through a formal channel. All questions from potential suppliers should be submitted in writing, through a designated channel, by a specified deadline. All answers should be published to all potential suppliers simultaneously. This ensures that all suppliers have the same information base and protects the fairness of the process.
Evaluate all proposals against the same criteria, in the same way. Use a structured evaluation matrix with the criteria and weightings established before the process. If multiple evaluators are involved, calibrate their scoring before the evaluation begins. Document the basis for every score.
Debrief unsuccessful suppliers. Providing feedback to unsuccessful suppliers is good practice, required by many procurement frameworks, and supports a healthier supplier market. Suppliers who understand why they were not selected can improve their future proposals.
XNM supports public-sector and capital-project clients in designing and running procurement processes. Reach out to XNM's procurement, sourcing & contract management team to discuss RFP design and procurement process support for your organisation.