If you are considering buying equipment, upgrading your company's computer systems, using a new service like employee leasing or are just looking for the best T-shirts at the best price, consider distributing a request for proposal, or RFP, to local providers and on classified ad and freelancer websites. You will have to be more careful about checking out the responders' references, but RFPs save you time and provide other benefits to your company.

Objectives of RFP Procurement

The overall business objective of a request for proposal is to provide your company with the best work value for the price. Generally, a contract for work or materials is not awarded to the lowest price submitted in response to the RFP, so evaluate the entire proposal with regard to your needs. A consistent RFP program will introduce different vendors to your company that you might not normally encounter if you just searched the Internet or asked colleagues for referrals. Furthermore, each proposal will suggest different ways to approach your needs and give you ideas that might prove valuable.

Goals of an RFP

Your RFP has the goal of getting a project or procurement completed as quickly and beneficially as possible. You can improve the value of your responses by examining exactly what you want accomplished. For example, if you need a website, describe its purpose, how your company expects to benefit from it and whether it will support e-commerce, compile data or include a blog. If you want to buy T-shirts for printing, stipulate fabric content, fabric weight, finish, sizes, colors, country of manufacture or organic materials. Details of how and when you want your purchase delivered are also important. The more exact you can make your RFP, the easier it will be to evaluate proposals and the closer it will come to fulfilling your goal.

Benefits of Using the RFP in Your Business

Every RFP response adds to your company knowledge base. If you indicate that your RFP gives the minimal requirements and that you expect suggestions for the best way to achieve your goals, you will learn about options and alternatives that might help you achieve more than you had originally expected. You will also learn more about how each bidder operates and her skill levels. Over time, you are likely to develop relationships with an extended group of providers who are professional, reliable and responsive to your needs while charging fair prices.

Potential Problems to Avoid

Once you select a proposal, negotiations begin. One strategy bidders use is to drag out the negotiations until it becomes difficult for you to re-engage with the other bidders. Avoid this by setting a sign-or-quit date in the RFP. This will force the winning bidder to negotiate seriously and quickly or risk losing the job if you arrive at an agreement with one of the other bidders. Avoid misunderstandings by clearly stating your budget requirements in general terms. Sometimes a vendor can provide better service if the budget is stated up front, leaving the vendor to figure out how to give the best service at the stipulated price.