RFP in Project Management — Importance and Process

What are RFP Evaluation Criteria?

A request for proposal (RFP) is an important document used to solicit bids before acquiring goods and services for a project. 

Almost all companies use RFPs in launching their projects. Many governments around the world also use this to start their projects. An RFP allows companies to select the most preferred candidate for their project. 

RFP is the most common tactic in procurement when companies want to select the best bidder for the project they want to do. The term RFP describes both the RFP document and the RFP solicitation process used in soliciting proposals.

As RFP helps companies select their preferred bidders, it also allows them to properly evaluate the strengths and weaknesses of the offers without spending too much time and resources looking for them.

7 Steps For an RFP Process

A systematic and organized RFP is very important to ensure that your RFP is effective and efficient. By undertaking the steps enumerated below, you can have a balanced and impactful RFP process:

1. Initiate the Project

Before anything else, it’s crucial that there is a project that your company wants to do. There should be a clear definition of the said project’s objectives, scope, and budget. Identify the type of vendors needed for the your project, which will include your specific requirements and standards for qualifications.

2. Draft your RFP

Now it’s time to draft your RFP. Be specific with your requirements, expected timeline, scope of work, criteria, and your submission guidelines. If you have any special requirements, then it’s best to outline that as well in your RFP.

3. Identify the Right Vendors

It is not enough that you identify suppliers, it should be the right and qualified potential vendors. Identifying your potential vendors beforehand would save you much less time moving forward, allowing you to evaluate if they will fit with your set criteria and standards.

4. Promote and Distribute the RFP

Once you finish drafting your RFP and identify your potential vendors, it’s time to actually promote and distribute the said RFP to the pre-selected vendors to disseminate the news of your project. This will give your shortlisted vendors to review the guidelines and specifications.

5. Address Vendor Clarifications

In the event that there are questions and clarifications, you have to be sure to answer said questions. Make them understand the guidelines and specifications clearly.

6. Submit the Proposals

Now you wait. The proposals will be submitted to you after you clarify their queries. Once you receive the proposals, evaluate which ones you think are the right fit for the job.

7. Evaluate, Select, and Award

Clearly evaluate, select, and then finally award the vendors that you think qualifies for it. To do this, you should have a proper selection criteria. Then you negotiate and come to an agreement before setting the project into action.

Why is it Important?

An RFP is a proposal document companies create to describe the specifications required to finish their project. With an excellent RFP, you can do these:

• Gather quotes from numerous suppliers to evaluate their prices and abilities which are factors to select for your project. 
• Outline your specifications that allow suppliers to understand what to bid to win the project. 
• Quickly evaluate the strengths and shortcomings of the bidding suppliers.

RFP project management is a crucial tool to check and compare the bids to effectively choose the best supplier to do business with. It also allows companies to scrutinize the project from different angles since each bidder includes their plan of action with their offers for the project. 

The best thing about RFP project management is that you will have the information you need from the bidders before committing to one of them. 

In my time as a procurement manager at Ahold Delhaize, I frequently used the RFP document. Here, I experienced firsthand how it contributes to an efficient procurement process. I utilized this document for the procurement of various private-label products. The greatest advantage I experienced was that it saved me a lot of time, as it allowed me to provide the same information to various suppliers in a structured manner.

Also, within project management, there are many advantages to working with an RFP and the associated process. It provides clarity and structure for the entire project. Additionally, it certainly fosters more competition and therefore likely more competitive bids. If you do not use an RFP, the most common alternative is to engage in discussions with one or a few potential suppliers.

After having multiple conversations with, for example, a contractor and feeling that you have received a good price, you might agree. When you use an RFP, which forces you to compare multiple bids, you get a better idea of what is possible and at what costs. This allows you to make an informed decision and possibly save costs.

Moreover, working with an RFP forces you to clearly define all project requirements and expectations in advance. This reduces the chance of misunderstandings and increases the likelihood that the final result will meet all the requirements. Risks are also better managed because all parties know from the start what is expected of them. This makes it easier to meet deadlines and keep costs within the budget.

Finally, using an RFP ensures a documented and transparent process. This is not only useful for the current project execution but can also serve as a reference for future projects. It provides an overview of which suppliers responded and how their proposals were evaluated, offering valuable insights for further collaboration and supplier selection.

Improving The Proposal Process With Project Management

Here’s how you can improve the proposal process with project management.

1. Know the goal of the project

Knowing the goal of the project is pretty straightforward to win an RFP opportunity. It is important to think beyond the RFP and identify why your RFP is a good fit as well as the impact of it on the business once you complete the project. 

2. Define the tasks of the project

Once you know your goal, you must clearly identify the following tasks that your team must accomplish:

• Identify tasks that can be accomplished at the same time
• Schedule a kickoff meeting
• Collect and submit follow-up questions for the buyer
• Customize reusable answers 
• Review your answer for consistency and accuracy
• Format a proposal
• Ensure that the RFP requirements are met
• Submit your final proposal
• Request feedback from the company
• Hold a meeting for feedback to know your strengths and weaknesses

3. Create a proposal team

Now that you have listed down your task list, the question that you have to deal with is who are the people best suited to accomplish all the items on your list? 

Match the people with the tasks they will be assigned and the role that they will take part in the process.

4. Check the information and tools needed

Once you know the people that will compose your team, you need to ensure that your team has the right information and tools to accomplish the tasks you identified. 

You may ask yourself, Do I have the performance data and customer references that the buyer asked for? Has your team researched well and gathered customer insights?  

You should check the information on your resources by verifying if it is available and enough for the project to avoid delays in your process.

5. Start the project and track and document key data

Now that you have taken a lot of things into consideration, the only thing to do is to start the project. In the kickoff meeting, you must ensure that your team knows the RFP project management approach and how to use it. 

As you continue making the project, you must track the consistency of your process. You can track it by gathering data on the response costs, time spent, answer quality, and outcome. 

Once you have collected enough data, you should review all your processes if there are any roadblocks and opportunities for improvement.

Conclusion

RFP in project management is a crucial tool for companies to select the best bidder for their project. It allows companies to evaluate the strengths and weaknesses of the offers without spending too much time and resources looking for them.

In this article, we have discussed what RFP in project management is all about, its importance, and how to improve your proposal process with project management.

By following the steps outlined in this article, you can make all your proposals clear and efficient, and ensure that your RFP process is well-managed and successful.