Tips for Creating and Soliciting RFPs and RFQs
In the business-to-business field, one common technique that companies use to find qualified providers is by issuing a Request for Proposal (RFP). This gives companies the chance to submit formal proposals and cost estimates, and gives you the ability to review the qualifications and perspectives of many companies at once.
Related to the RFP process, many companies also use a process called Request for Qualifications (RFQ), or even Requests for Information (RFI). These are often used in the technology field to screen potential technology providers, to find those that have the background and experience necessary for the project. They can also be used occasionally in other fields as well.
Our background at Amadeus Consulting is in custom software development, meaning that we create software systems according to our client’s needs. This includes everything from database development, ecommerce websites, and mobile applications. Through our many years of business, we have responded to many RFPs and RFQs, as well as direct proposal requests, and we would like to provide some ideas and tips from a provider’s perspective.
Keep in mind that one of your goals is to find the best provider possible, at the best price possible. From a provider’s perspective, responding to RFPs and RPQs is very time intensive and often expensive, so providers are usually very picky about which contracts they pursue. For companies seeking a RFP/RFQ, there are many things that they can do that will maximize the response rate and receive the most competitive bids.
Also for government organizations, it is important that you know and understand all of the proposal rules and regulations unique to your agency.
General RFP/ RFQ Tips
- Avoid a formal RFP process if possible. Instead, focus on opening up a dialog and building a relationship with perspective providers. This is beneficial to you in the long run as you are better able to find providers that understand your business and processes, and you will be better able to understand their capabilities. Soliciting bids can be done outside of a formal RFP process.
- Send requests to people and companies you know. Many companies will ignore unsolicited RFQ’s simply because they take a lot of work to prepare, and offer little guarantee of a successful contract.
- When sending RFQs, limit it to a maximum of 20 vendors. This benefits you because you can better target the companies, without spending too much time researching each one individually. It also allows you to get a broad range of companies without getting too many responses which may take a lot of time to filter.
- After receiving RFQs, limit RFPs to a maximum of five vendors, although 3 is generally preferable. In addition to the RFP, engage in dialog with the suppliers so that you are better able to solicit ideas and different approaches outside of the strict RFP requirements.
- Spamming RFPs, or sending out open RFPs, sends the message that a company is only interested in the best price, not in the best solution provider, and will reduce the number of experienced companies that reply. Limiting RFP’s to targeted companies still ensures competitive pricing, but also helps ensure the best quality.
- Personally thank all companies that submit proposals. This builds relationships that can be very beneficial for future projects.
In most cases, it is very helpful to engage potential providers rather than just relying on sterile written reports. Your goal to find the best provider is often hard to judge without actually talking to the teams that will be working on the project. Of course there are situations where RFPs are required, but in private industry, RFPs are often an over-used and unnecessary obstacle to helping you find the right technology partner.
In addition to these tips, there are also a few ideas for finding good potential candidates to whom you can send your RFPs/RFQs.
RFP Tips for Finding Potential Candidates
- Identify the problem that you are looking to solve. Define it in as few words as possible. This helps you narrow the potential solutions and to identify which characteristics (skill and experience, usually) need to be displayed by potential providers.
- Seek out companies that focus already on your solution. You can use search engines, current contacts, referrals, business listings, or past providers.
- After building a sufficiently large list, begin to narrow that list by visiting websites, interviewing principals, requesting work samples, and viewing portfolios. Websites can be extremely valuable, as companies often show evidence of successes that they have had with previous clients, as well as certifications and areas of expertise. If a company only provides names of past clients, ask for specific examples.
- If the list cannot be narrowed below 10 potential solution providers (or preferably down to 3-5), consider sending out a request for information (RFI) or request for qualifications (RFQ). This should be sent to no more than 20 candidates, as doing more will take considerable time for you. RFIs and RFQs are a less formal method than an RFP, but can help find the best candidates based on quality of work, capabilities, relevant experience, reputation, staff size and geographical proximity.
- When reviewing companies, look for responses that are clearly written, free of unnecessary jargon or “marketing-speak” and that clearly address your solution.
- If you can, narrow the list down to less than 5 (preferably 3) companies. By this point you should already know exactly what you need, so instead of asking for an RFP, try soliciting bids. This allows you to better engage potential providers in a two-way dialog, which creates a better working relationship and helps you more accurately, determine how well a potential provider “fits.” On paper, companies may look very similar, but by engaging each potential client, you can quickly discern which one has the technical competency and productivity that you need to build your solution.