Definitions
A Request for Proposal (RFP) is
| “ | an invitation for vendors to submit a proposal for a specific product or service. RFPs are usually designed to get vendors to provide a creative solution to a business problem or requirement. | ” |
| “ | (1) a request to the vendor community which requires submission of credential and a formal plan addressing the needs that have been set forth in the solicitation. (2) a request for vendors which invites submission of a formal plan to address the needs that have been set forth in the solicitation.[1] | ” |
| “ | used to solicit proposals from the bidding community based on a set of defined requirements. The requirements may be general in nature allowing the bidders to propose a solution and the specific products to be used. The RFP describes the problem requirements, contractual terms, and required format for the proposal responses. The RFP also includes the specific criteria which will be used to evaluate the received proposals.[2] | ” |
| “ | [a] solicitation used in negotiated acquisition to communicate government requirements to prospective contractor[s] and to solicit proposals.[3] | ” |
Overview
A Request for Proposal is a tool that can be used to facilitate the selection of a qualified service provider and assist with the contracting process.
The RFP process consists of a set of tasks that can be grouped into three major categories: development of a baseline, proposal preparation, and selection activities.
Development of a baseline
- Determine the purpose and goal of the procurement.
- Assign a proposal project team and an evaluation team.
- Plan the project in terms of cost schedule, functional requirements, and resource requirements.
- Develop a "baseline" that represents a current "as is" description of the affected environment in terms of current cost, inventory of systems, and services.
- Develop a "needs assessment" which describes management’s assumptions on how to more effectively serve its customers.
- Determine the future requirements by analyzing anticipated needs and project objectives.
- Determine the disparity between the current environment and the future requirements in order to identify the gaps that need to be filled to get from the current environment to the desired environment.
The various tasks that comprise the baseline activity are designed to establish a clear picture of the goal and objective of the procurement. In addition, a detailed understanding of the current environment is typically established in order to determine if there is a gap between the current environment and future needs. Finally, this baseline understanding of cost and service levels is useful in conducting a cost/benefit or return on investment analysis.
Proposal preparation
- Develop the Statement of Work — a technical document that outlines basic requirements.
- Draft the RFP based on the contents of the Statement of Work.
Proposal preparation tasks are focused on defining the requirements, which are then presented in the form of a Statement of Work or similar document. The Statement of Work indicates desired services, the roles and responsibilities of each party, and the required service levels or performance standards.
Typical RFP format
- Executive summary
- Introduction
- Background of the organization.
- Scope of services being requested. (e.g., Web hosting, infrastructure outsourcing, disaster recovery, etc.)
- Background on the business process, including current status, existing roles, and responsibilities of the people who will be working with the vendor.
- Statement on the confidentiality of information.
- Overview
- Statement of mission/vision of the organization.
- Statement of business objectives the organization wants to achieve.
- Statement of scope in terms of which business functions, business units, applications, packages, geographies, and technology platforms are being covered by the RFP.
- Role of the service provider.
- Project schedule
- Service provider RFP question deadline.
- Service provider analysis meeting (optional).
- Proposal due date. (Generally, according to industry practices, service providers need four weeks to respond comprehensively to anything other than simple undertakings. Less time may result in poorer, less innovative and probably costlier solutions.)
- Service provider demonstration day.
- Contract negotiation.
- Final decision.
- Proposed implementation start date.
- Statement of Work
- Detailed technical requirements, describing the required business applications and their functionality, as well as the hardware and infrastructure platform and communications requirements for each area and operational configuration.
- Transition, implementation, training, start-up, maintenance, and security requirements.
- Performance criteria for success of the solution.
- Project management and service level reporting requirements.
- Indication of performance/service level incentives and penalties.