RFP Is the Prelude to a Contract

RFP Is the Prelude to a Contract

19 November 2010

The sending of a RFP, or request for proposal, is the prelude to inquiring the prices from a company for the necessary supplies or services they will be providing your business. This is a necessary process that most project managers have to go through in putting a project together for their company.

The RFP is a formal document that is used for communications between two companies. This is before any contract is drawn up or agreed to. In most instances, the number of requests for proposal is matching the number of responses received from the request for information that were positive.

The sending of an RFP does not constitute a contract, only that one is possible. It is similar to an invitation to bid process in the construction industry that many are used to. A business is sending out what they would call feelers to see just how low they can acquire the necessary equipment, products or services so they can complete their projects at the lowest cost. That low cost can generally be reflected positively in the profits for the business sending out the requests.

When one of your RFP is received back, it should be closely examined. The information that needs to be confirmed is whether the product or services you requested is what they are offering. Sometimes, there is a miscommunication and the third party vendor is quoting a price on an item that was not requested. Trust with verification is the best motto.

Another item that should be verified when receiving an RFP is the time frame they have quoted. This should match up with your needs. If it does not, then look if the price is low enough as compared to the other responses to see if it is more profitable to wait or just discard because it does not meet your requirements.

The RFP is not the final process in acquiring the necessary equipment, services or components for your project, but it is a necessary one. Time and good judgment should be taken when reviewing all the responses so the best choice can be made.