18 Must-Have Negotiation Skills For Procurement Professionals
RFP Process – The Ultimate 4 Step Strategy for 2023
After this article, you should have your very own 4 step strategy for creating your RFP process.
The RFP Process and Procurement
Before we move forward to the 4 step strategy for this year 2023, it’s time for a bit of a recap.
RFP stands for Request for Proposal. Sometimes, it’s called a Request for Procurement, just because the proposal is about procuring materials. It is the procurement phase where you create documents as part of an announcement that you, the procurement manager, intend to create a project or task that requires the procurement or sourcing of important services or products. The document entails a description of the purchases, the materials needed, and a bid of solicitation from qualified contractors who can complete the procurement.
RFPs are used for launching procurement projects and governments, most of the time, are very familiar with these requests for procurement. It is usually the job of the procurement manager to evaluate where the bids are coming from, check the company status of the ones who want to bid for the project, as well as understand the ability of the company to undertake the project.
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Why Create an RFP?
If it’s just a simple procurement, why ask for a number of bidders, right? That’s because, for simple procurement processes, there is sometimes no need for requests for procurement. But if the procurement is a big project in itself and it may need a number of bidders for the job to function, then you are going to need RFPs to evaluate and bid who gets to do the project.
For government projects, RFPs are very important for removing cronyism for public procurements. What this means is that everyone gets a fair chance in bidding for the project because the RFP highlights the ability and status of the bidder for the procurement manager or administrator to check. If a bidder’s status makes the cut, the project is awarded to them. If not, then there is a chance for the other bidders to get the project. Of course, depending on how many bidders there are for the project, there can be times when the potential responses coming from bidders are limited.
Without RFPs, there will be bias as to who gets the project. Friends and/or close associates with the procurement manager or admin will be awarded the contract for the proposal without looking at the other bidders. Most of the time, this system fails because the one who gets the contract is not able to finish the project. If they do, the results are often poor.
RFP – Where Does it Fit in the Procurement Process?
As a whole, RFPs often fit during the early stages of the procurement process. Proposals are often used when you need to announce something right, so it’s only natural that it comes first in the list.
As an example, this is how a procurement process usually looks like together with the RFP:
- Create clear requirements in a work statement for the product or service that you are procuring.
- Develop and approve the Request for Proposal while following the RFP standards of getting great proposals and reducing the risk.
- Identify prospective vendors
- Respond to vendor questions
- Receive, evaluate, and score proposals
- Down-select vendors and conduct interviews and demos
- Creating scoring workbooks for proposal evaluation
- Perform pre-contract risk assessment and due diligence on the finalist supplier
- Negotiate and award the contract
The Difference between RFI and RFP
Since we already know what RFP means, it’s time to have a look at another procurement process that is also closely related to RFP.
The team of Procurement Tactics created an overview of all the differences between RFI & RFP you are looking for!
RFI means Request for Information and from the looks of it, it is pretty similar to RFP except for a few key statements:
- The requirements for RFI are neither defined nor understood but RFP’s requirements are understood, documented, and clearly defined.
- RFI is all about looking for information to outline capabilities and approach while RFP is all about looking towards a formal response together with pricing
- RFI is also about getting information to learn about a particular service; RFP has strict procurement rules for content, timeline, and vendor responses.
- RFI is a mechanism used to “down select” RFP recipients while RFP promotes supplier competition and builds leverage.
The 4 Step Plan for the RFP Process
Since we’ve clearly understood now how RFP works, it’s time to move forward and learn the 4 step plan to building and establishing an efficient RFP process.
And like most tips that we write and share on our website, these are all just small lessons we’ve created and perfected in our Negotiation Course For Procurement Professionals. It’s our fool-proof plan of building the best procurement process system tailored for the best negotiators in the world.
In any case, to build an efficient RFP process, you need to consider the following:
1. Choose people who can help in interpreting and resolving problems
For your RFP to work, it needs to be built by people who have an idea on how the whole procurement process works while following the guidelines set by the admin or company. There’s really no shortcut to this. You need to pick the right person in creating the RFP.
2. Create policy statements that specifically address the rule, and procedures that direct the implementation of activities.
Your RFP will be lined up with proposals and statements that address the procedures needed for the bidding to work. As such, your proposal should indicate that thoroughly and boldly.
3. Identify the roles and responsibilities of each member of your procurement team to avoid confusion.
While this plan is generally followed for every procurement process, it is still relatable for requests for proposals. There should only be one or two people in charge of the proposals section of the procurement process. The others can work on tasks assigned for them.
4. Use clear and simple instructions that your procurement team can understand.
This is already a given. Clearly, one can’t be technical with RFPs because not everyone who reads the document or proposal is very familiar with technical jargons. If they are, then that’s good. If not, be considerate and create your proposals in a clear and understanding way.
+ What is RFP process?
RFP process is a series of actions that allow for the efficient use of RFPs or requests for proposals.
+ What is RFP?
RFP means Request for Proposals. It is a process in procurement where an announcement is made or documented towards the procurement of a supply or service.
+ Who does RFP?
The procurement manager is in charge of RFPs most of the time.
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