What is an Request for Proposal (RFP)?

Posted on October 14, 2015 By

A Request for Proposal (RFP) is a formal request for vendor bids to provide services or materials.  It might be for a governmental, business or non-profit organization that is requesting the vendor information and prices.  Why is it used?  It’s a great way to provide uniform information to all vendors.

What are the essential elements of a RFP?

  • Asking for a Quote for a Service or Product.
  • Clarity
  • Quantity
  • Time Frame
  • Deliverables
  • Intangibles
  • History
  • Background
  • Project Parameters
  • Contact information
  • Application Deadlines

Many governments, non-profits, and large companies use RFPs.  They serve an essential part of the vendor search process.  It’s a formal long form document that can clarify and describe the needed work.

It’s important to carefully read the contract requirements and contact information.  It’s possible there might be a prior approval need to apply for the RFP, the Request for Information (RFI), an approved vendor’s list, or be entered into a specific database.

Helpful hints in responding to RFPs.

  • Look at other awarded RFPs from that same government or entity for guidance
  • Describe the volume that you can provide
  • Mirror the same vocabulary.  Ex. DOD contracts use specific terminology.
  • Research anything that is not obvious.
  • Describe the effectiveness of your delivery, products or services.
  • Describe how those items will fulfill the RFP.  Be careful not to promise the moon.
  • Read blogs/articles from the government or entity.

Here are some helpful items that help you create an accurate quote:

  • Create a project management costing sheet to quantify the project.  Once the contract is signed, your profit and loss may be predetermined.
  • Know the difference between different shipping terms.
  • Know industry buzzwords.
  • Call the contract officer if you have any questions.
  • Add an adequate gross margin.
  • Know which expenses will be reimbursed and which will not.
  • Create an adequate labor structure costing model.
  • Accurately quote labor costs and hours
  • Determine profit margin and IRR

Let us know if you need help with this process.  We create an effective plan and response to RFPs.

Laura Dodson
Follow me

Laura Dodson

Laura Dodson, CPA is a Seattle Financial Planning & Analysis consultant.She has attended Western Washington University, Pierce College and Bates Technical College. She has written four accounting instructional books. She has worked for small family businesses, mid-sized businesses and a Fortune 500 company.She founded and operated Blue Stone Accounting LLC for five years.She currently runs Paper Butterfly Forge LLC.
Laura Dodson
Follow me

Latest posts by Laura Dodson (see all)

Uncategorized     , , ,