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As an agency leader, do you ever feel pulled in opposite directions?
That’s a real possibility when it comes to requests for proposal (RFPs).
An RFP solicits proposals for services, usually on projects with multiple facets, phases, or deliverables.
Agencies can be on both the giving and receiving end of the RFP process. For example, a business might create an RFP for a comprehensive marketing campaign, including commercials.
Let’s say your agency wins that bid, but you don’t handle advanced video production in-house. You could then issue your own RFP, seeking vendors for that component.
Since RFPs can be a key part of agency business, it’s important to understand what they are, what makes an effective RFP, and when and how to use them.
The importance of RFPs
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RFPs are an important tool for agencies and businesses alike. They provide a way to compare options in complex procurement scenarios — since there’s not really an Amazon or Walmart for comparing and hiring vendors.
RFPs also provide a level of fairness to vendors, giving each one the opportunity to put its best foot forward and make its most compelling case.
This approach is also more cost-effective and less time-consuming than manually seeking out and interviewing vendors. So it helps protect internal resource constraints (something that’s always important but especially so in lean project management).
RFP vs. RFQ vs. RFI
“Understanding these differences can help businesses choose the right tool for their procurement needs and help vendors respond appropriately. Remember, the goal is to foster clear communication, ensure the best fit for the project, and ultimately, establish successful business relationships.”
RFP documents aren’t the only type of requests you might encounter. Others in the RF family include the request for quote (RFQ) and the request for information (RFI).
It’s definitely easy to get mixed up here, especially because many people using the terms don’t have a clear handle on them!
The differences between the three involve scope and intent.
An RFI is for when you’re just requesting information. Maybe you don’t know enough to build an effective RFQ yet, so you’re gathering information that will inform where you go from there.
An RFQ is more focused than an RFI, usually for when you know what you need, and you’re looking mostly for a price quote.
An RFP is usually much more involved. You’re looking for the vendor to define the specifics of what they’ll do for you — and what they’ll charge you for it.
It’s important to identify which one will work best for your needs (or which one you’re responding to), so you can include the information needed to make an informed decision.
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Key components to include in requests for proposal (RFPs)
RFPs are flexible documents, and different requesters will need different things depending on what the proposal is for. In other words, an RFP for a city planning or architectural project is going to look much different than a digital marketing one.
That said, just about every RFP should have a similar set of components. You may need to add to this list, but you would rarely take away from it.
So, as you craft your request for proposal, make sure each of these key components is present.
Company information
First up is company information: who you are, what you do, what drives you — and most importantly, how to contact you.
This is your basic “get to know you” introduction, and it matters because not every vendor is going to be a great fit. The information you include here will help bad-fit vendors self-select out of the bidding process.
As for contact information, no matter how digital-first today’s business economy feels, there’s still a decent chance your RFP gets printed and dropped on someone’s desk. Make sure the person who eventually ends up with the responsibility of getting back with you has all the information they need to do so.
Project scope and objectives
Next up, detail the project scope and objectives. By this point, you probably already have a project proposal, which includes at least basic information about the scope of work.
Use or adapt that material (along with information in other business documents, such as the statement of work) so that your prospective vendors have a clear idea of the specific project. Make sure they can understand your specific goals and objectives tied to the final outcome.
Often, you’ll have background information that would help potential contractors understand the project (and the project goals). If so, include that information here as well.
Requirements
Here’s where you’ll include the requirements a proposal response must meet. These draw on your project requirements (so make sure you’re thoroughly documenting them), though they usually won’t be identical.
Requirements flesh out the “what” of the project, expanding on the information in the project scope and objectives. Any expectations you have about the desired result, deadlines, milestones, specific deliverables, and so on should be here, if not already mentioned in a previous section.
Evaluation and selection criteria
With an RFP, you’re typically weighing numerous factors when choosing a vendor, not just picking the cheapest one. (If you’re comparing on price only, then you probably don’t need the complexity of an RFP at all — an RFQ should do the job.)
So, in this section, tell the people what you’re judging them on. Giving away your evaluation criteria might seem unhelpful at first, because you don’t want vendors just telling you what they think you want to hear.
But in reality, it tends to be the best option. It levels the playing field and prevents an accidental miss, where the best vendor doesn’t look the best because they guessed wrong about what you wanted to know.
Submission instructions and timelines
Last, let your potential vendors know how and when they should submit their proposals. It’s customary to have a firm deadline, and if the proposal is anything more complicated than a PDF, you’ll want to tell bidders the right way to submit their support materials and work samples.
Benefits of using a request for proposal (RFP) process
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The RFP process isn’t simple. So why do agencies use it? Because for the right kinds of projects and proposals, it outperforms the alternatives, and here’s why.
Fairness for vendor selection
The RFP process adds a level of fairness in vendor selection (which is why most government-contracting scenarios require it). Instead of going with the most familiar or favored vendor, agencies can gather proposals from numerous good-fit agencies and compare them. This process removes barriers to access as well, enabling greater equity.
Ability to compare options
Like we said earlier, there’s not exactly a Videographers ‘R Us where you can pick out the one you need. It just isn’t that simple. The RFP process enables you to compare options in a much more detailed and convenient way by bringing the vendors to you.
As you evaluate various RFP responses, you’ll doubtless see things you like and things you don’t. You can evaluate each response against the criteria that matter most, and then you can evaluate them against each other.
Better alignment with objectives
With a stronger sense of which vendors are capable of what, you can then select one based on fit and experience. In the end, you’ll get better alignment with your objectives and better overall results.
Common RFP challenges
While the RFP process is often the best choice, it isn’t without challenges. These are three of the most common hurdles — with solutions for each.
Resource and time constraints
Putting out an RFP is supposed to solve resource and time constraints. It should free you up from having to manually identify and vet vendors and put the ball in their court as far as timeliness.
But, ironically, RFPs can cause the very problem they’re aiming to solve. They can eat up resources and blow up your schedule if you’re not careful, threatening project profitability and success.
To avoid this risk, proper planning and a clear, comprehensive RFP are key. When you thoroughly detail what you need and request the right information upfront, you’ll avoid the painful, time-consuming back and forth with vendors trying to get more details.
Vendor relationship management
Be aware that a poorly managed RFP process can strain existing vendor relationships. If you’re asking an established, preferred vendor to suddenly jump into the RFP lottery and compete for your business, they might just take it personally.
There’s also the difficulty of keeping up with all the vendors responding to the RFP. It’s easy to miss communications and drop balls.
One solution: assign a designated person to handle your vendor relationship management. Keeping all relevant communications going through one person is better for both consistency and efficiency.
Making requirements clear
RFPs are, by nature, wide-ranging and sometimes a bit open-ended. But they still need to be clear. If the requirements are murky, the responses might be vague too. What seemed like a bargain may turn into a train wreck when it turns out the vendor didn’t understand your intended scope.
Instead, take the time to make requirements clear from the outset. Doing so will help you avoid re-work, plus it will help preserve positive working relationships with your vendors.
Create and manage your agency’s requests for proposal (RFPs) with Teamwork.com
The request for proposal has a long history in the agency world, both as something to chase (for big client projects) and something to produce (to round out your own capabilities).
Building good RFPs takes careful planning, strong organization, and access to the right project data. And Teamwork.com is the perfect platform to achieve all three.
With Teamwork.com, all your project data lives in one place, and you can easily pull that data into your RFPs, thanks to a deep library of templates.
Get started for free now by trying out our project tracker template.
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