What is a Request for Proposal?

A request for proposal, or RFP, is a document that solicits proposals from vendors to select the best company to provide a product or service. The RFP generally includes an overview of the organization’s needs, as well as information about the vendor’s qualifications and proposal submission requirements.

In some cases, the RFP may also include a timeline for project completion and/or a list of desired features. Vendors respond to the RFP with their proposals, which the organization then evaluates to select the best option.

The RFP process can be used for various products and services, from office supplies to software development.

Synonyms

• Call for proposal: A call for proposal, or CFP, is a request for vendors to submit proposals for a project. The term is often used interchangeably with RFP.
• Tender: Similar to an RFP, a tender is a formal invitation for vendors to submit bids for a specific project (primarily government or public projects).
• Request for quotation (RFQ): Also similar to an RFP, an RFQ is a document that formally solicits price quotes from potential vendors or service providers.

The Purpose of an RFP

At its most basic level, an RFP is a structured way to solicit proposals from vendors or service providers. It ensures that multiple companies compete for your business, which should theoretically get you the best quality service at the best price. But the real power of an RFP is in how it helps you clarify your own needs, streamline vendor selection, and reduce long-term risks.

Forces internal clarity

Before you even send an RFP, you need to define exactly what you want. Many businesses realize, in writing their RFP, that they weren’t as clear on their objectives as they thought. This process helps align internal stakeholders, ensuring that everyone from operations to finance agrees on key priorities before external vendors are involved.

Facilitates side-by-side comparisons

Without an RFP, it’s hard to objectively compare vendors. Even if you’re not a giant corporation, an RFP can help when choosing a marketing agency, legal service, web development firm, or business consultant. It ensures that every dollar you invest goes toward the best possible solution rather than just picking the first option that looks good.

Creates a competitive edge

Companies that regularly issue RFPs tend to get better deals and higher service quality because vendors know they need to compete. Even if you have a preferred vendor in mind, an RFP ensures they don’t get complacent and will continue to offer competitive pricing and favorable terms.

Reduces the risk of bad partnerships

Without one, you might choose a vendor based on familiarity or relationships rather than data and proven qualifications. A well-structured RFP demands that vendors provide transparency on their processes, technology, and scalability—helping you avoid bad investments.

Improves long-term budgeting and cost predictability

When vendors bid competitively, you can often secure longer-term contracts with fixed pricing, which helps you stabilize your operating expenses. Additionally, RFPs eliminate some or all hidden costs, as vendors have to outline the full project scope and deliverables upfront.

Enhances compliance and legal protection

If you’re in a regulated industry (finance, healthcare, government contracts), an RFP serves as a compliance safeguard, proving that you followed due diligence in vendor selection. Contracts based on RFP responses are legally stronger, helping you avoid scope creep and surprise fees down the road.

Provides industry-specific value

Your industry or business model will shape how you use RFPs as well.

If you’re in engineering or B2B manufacturing, RFPs help you source materials, production partners, or equipment. Vendors have to prove quality control standards, reliability, and compliance with industry regulations, which helps you ensure long-term supply chain stability instead of just chasing the lowest price.

If you run a tech startup, you need development partners for software, AI, and IT infrastructure. A strong RFP can help you compare not just cost but technical capabilities, cybersecurity practices, and scalability. It also protects you from vendors who might overpromise and underdeliver on technical execution.

If you run an ecommerce business, you can use RFPs to select fulfillment centers, logistics providers, or payment processors. Potential partners will have to prove scalability, integration with your platform, and customer service response times.

If you’re in construction or real estate development, RFPs help you vet subcontractors, material suppliers, and architects for complex projects. You can specify sustainability requirements, compliance with local regulations, and prevent delays caused by unreliable vendors.If you work in government contracting or enterprise sales, RFPs will be how you secure some or all of your new business.

What Is the Importance of RFPs In Business?

By using a request for proposal, organizations can be sure that they are getting the best products and services for the best value. And by allowing multiple companies to compete for their business, organizations can encourage vendors to be innovative in their proposals.

RFPs can also help organizations to save time and money by streamlining the vendor selection process. By clearly outlining their needs and requirements in an RFP, organizations can avoid spending valuable time and resources evaluating proposals that do not meet their needs.

RFPs help to build sales relationships with vendors. When vendors and organizations have a clear and open line of communication from the start of the RFP process, it can set the tone for a productive and positive relationship going forward.

The Request for Proposal Process

A request for proposal isn’t just about sending a document out and waiting for proposals. Each step serves a clear-cut purpose. Get the process right, and you’ll save time, avoid frustration, and attract better vendors.

Step 1: Define your project and goals.

Before you even start writing an RFP, you need to clarify exactly what you need.

• What problem are you solving?
• What’s your budget? Timeline? Success criteria?
• Who will be involved in the decision-making?

A lot of businesses skip this step or rush through it. But if you don’t have crystal-clear objectives, you’ll get vague proposals that don’t solve your real problems.

Step 2: Draft your RFP document.

Now it’s time to write the actual RFP. The key sections include:

• Overview of your company and project
• Scope of work (SOW)
• Requirements (technical, financial, security, compliance, etc.)
• Evaluation criteria
• Submission guidelines (deadlines, format, point of contact)

Make sure you keep it clear but not overly rigid. If your RFP is too restrictive, you might limit your prospects’ capacity to be creative and innovative.

Step 3: Distribute the RFP to vendors.

Once the RFP is written, you need to get it in front of the right vendors. Send it to trusted vendors you’ve worked with before. Post it on industry platforms or networks where suppliers look for RFPs. And don’t forget to reach out directly to potential vendors you’re interested in working with.

That said, don’t just blast it out to a massive list. You’ll get too many low-quality responses. Be selective about who you invite to bid.

Ideally, you’ll use some sort of contract management software to manage the process more efficiently.

Step 4: Field questions and provide clarifications.

Once vendors receive your RFP, they’ll likely have questions. And that’s a good thing. You can set up a Q&A period where vendors can submit their questions (this is what most companies do). Make sure you’re giving consistent answers to everyone, though, so nobody gets an unfair advantage.

Step 5: Evaluate each proposal.

Once submissions start to roll in, you compare and analyze them based on your evaluation criteria.

Remember that price isn’t everything — you’ll want to look at experience, quality, long-term value, and risk factors. Score vendors using a weighted system (e.g., 30% cost, 30% expertise, 20% timeline, 20% innovation). And if proposals look too similar, request case studies or real-world examples to see how each vendor actually performs.

Step 6: Shortlist and conduct interviews and demos.

Once you’ve looked through everyone, you can narrow it down to the top contenders and set up interviews, sales demos, or presentations. This is where you can ask about their approach, team, and past projects. It’s also where you’ll see red flags, like vague answers or overpromising.

This step is critical for service-based contracts (e.g., marketing agencies, software developers, managed services, consultants). A great proposal means nothing if the team behind it can’t execute.

Step 7: Negotiate and choose your vendor.

Once you’ve chosen a finalist, you shouldn’t just accept the proposal as-is. Chances are good you can negotiate a better deal.

• Can you get better pricing or more value-added services?
• Are the terms fair on things like payment structure, warranties, and termination clauses?
• Do you have leverage, like a high deal size or long contract term?

Vendors expect this kind of negotiation. If you skip it, you might be leaving money (or better contract terms) on the table.

Step 8: Finalize the contract and kick off the project.

Your final step is to formalize everything in a contract. Make sure all the deliverables, timelines, and payment terms are clearly documented within the agreement, and set up an onboarding process so the vendor integrates smoothly into your business.

Keep in mind that tons of projects fail because there’s no structured kickoff process. A simple yet important detail is to assign an internal point of contact to manage vendor communication and keep things moving.

Creating a Request for Proposal

Creating a proposal request is not a simple task. The RFP must be well-written and thoroughly researched to ensure that all of the organization’s needs are met.

Elements of an RFP

Each RFP will have different elements, depending on the product or service being procured. However, some common elements are typically included in most RFPs, such as:

• Executive Summary and Background: A description of the organization’s history and information about the current project.
• Project Goals and Objectives: A clear outline of what the organization hopes to achieve with the project.
• Scope of Work: A detailed description of the work that needs to be completed.
• Qualifications: The criteria that vendors must meet to be considered for the project.
• Budget: The organization’s budget for the project.
• Schedule: A timeline for the completion of the project.
• Evaluation Criteria: The factors that will be used to evaluate sales proposals and select a vendor.
• Proposal Format: The format in which proposals must be submitted (e.g. electronically, by mail, etc.).
• Submission Deadline: The date and time by which proposals must be received.
• Contact Information: The name and contact information of the individual or department responsible for the RFP.

According to LinkedIn, organizations respond to 65% of their RFPs. By including all of these elements in the RFP, businesses can ensure that they will receive comprehensive proposals from as many qualified leads as possible.

Writing your RFP

A great RFP is clear, structured, and to the point. Vendors appreciate well-written RFPs because they help them respond efficiently and accurately. And for you, a well-structured RFP means better proposals, better decision-making, and better results.

1. Define your business needs.

Before you start the procurement process, you need to get crystal clear on why you need an RFP in the first place.

• What problem are you trying to solve?
• What’s the end goal?
• Are you looking for cost savings, innovation, better service, or all of the above?

Talk to internal teams who will use or interact with the vendor (e.g., IT, finance, marketing, or sales). They’ll have insights you might not have considered.

2. Get stakeholder buy-in and define your requirements.

Now that you know the challenge, loop in decision-makers to figure out the logistics of your project.

• Who needs to sign off on it?
• What budget constraints or compliance rules do you need to follow?
• What are the must-haves vs. nice-to-haves?

If leadership isn’t aligned early, you’ll end up rewriting the RFP after it’s already out, which is a huge waste of time. Be specific, but don’t dictate the “how” too much. Leave room for potential contractors to bring creative solutions.

3. Map out your technical and functional requirements.

Here’s where you lay out any must-haves for the project. Here, you’ll consider your tech stack (i.e., which platforms you’ll need to integrate). You’ll also consider compliance and security regulations and specific skills or certifications your potential bidders will need to have.

Here, it’s best to only focus on the real necessities. Overloading this section with “nice-to-haves” might scare off good candidates, and you’ll have fewer bids from vendors.

4. Draft the RFP.

Now for the actual writing. A strong RFP has all the sections we mentioned above to make it easy for vendors to understand what you need and respond effectively.

A few tips for making your RFP stand out:

• Your executive summary is your opportunity to “sell” the project to potential vendors. It should include information about the organization’s history and the current problem they hope to solve with procurement.
• Keep your project overview clear and concise. It should be a quick summary of your company, the problem, and what you’re looking for.
• Your SOW will be the longest section of this document. It needs to outline everything needed for a bidder to understand what you want — technical, regulatory, or industry-specific requirements, and your expected deliverables, milestones, and success criteria.
• Have clear evaluation criteria. How will you score responses (cost, experience, timeline)? Will there be interviews, demos, or proof-of-concept phases? Case studies? Minimum financial stability or team size? These things weed out vendors who look good on paper but can’t execute.
• Set transparent budget and pricing expectations. First, decide whether you’re going to give a budget range or ask vendors to propose their own cost estimates. Ask them to break down costs like labor, materials, and licensing fees as well.

5. Create your post-submission process.

In addition to submission instructions (e.g., where and how to submit), you need to set a deadline for proposals — ideally, some time between four and six weeks from the RFP release date. That should be enough time for a competitive bidding process.

Then you can put together a project team to review the responses, score them against your evaluation criteria, and make a shortlist of vendors to invite for interviews or demos.

After those conversations (and some negotiations), you’ll select the winning bidder and send out the contract for signatures.

Examples

When it comes to writing requests for proposals, there are many different types.

The three most common request for proposal examples are:

1. Consulting request for proposal
2. IT request for proposal
3. Marketing request for proposal

A consulting request for proposal is used when an organization is looking to hire a consultant to help them with a specific project. This type of RFP will request information about the consultant’s experience, qualifications, and proposal for the project.

An IT request for proposal is used when an organization is looking to procure new software or hardware through a single developer, agency, or software company. This request for proposal will ask for information about the vendor’s product, pricing, and implementation plan.

A marketing request for proposal is used when an organization is looking to hire a marketing firm to help them with a specific campaign. This kind of RFP will request information about the firm’s niche experience, proposed marketing strategy, and estimated budget.

How to Respond to an RFP?

Before writing your response to a request for proposal, vendors should have a clear understanding of what the organization is looking for. This means reading the RFP carefully and ensuring they have all the information they need to write a responsive proposal. Vendors should reach out to the organization for clarification before responding if there are any questions about the RFP.

Once vendors clearly understand the RFP requirements, they can start writing their responses. The proposal should be clear, concise, and well-organized so that the review committee can easily understand what is being offered. And most importantly, vendors should prioritize personalization in their proposals.

Request for proposal responses should also match the format requested in the RFP. For example, if the RFP request that proposals be submitted as PDFs, vendors should ensure that their response is submitted in that format.

It is also noteworthy that many organizations will request that vendors not include additional materials with their proposals (such as brochures or marketing materials). In these cases, only the information that is specifically requested in the RFP should be submitted.

What is an RFP Response Team?

An RFP response team is a group of people responsible for drafting, reviewing, and submitting a winning proposal when their company receives or seeks out an RFP. If you use RFPs in your sales strategy, they’re responsible for positioning your company to stand out from competitors.

The team varies depending on the company size and industry, but generally includes:

• Proposal manager: Oversees the process and ensures deadlines are met.
• Subject matter experts (SMEs): Provide technical, legal, or industry-specific details.
• Sales development reps (SDRs): Tailors the response to client needs and pain points.
• Finance leaders: Ensures pricing is competitive and profitable.
• Marketing and design: Polishes the proposal with branding, visuals, and clear messaging.

Before submission, the proposal goes through multiple rounds of internal review to refine messaging, fix inconsistencies, and ensure compliance with RFP guidelines. Once submitted, the team tracks the response, answers follow-up questions from the company requesting it, and prepares for potential presentations and negotiations.

Request for Quote vs. Request for Proposal

When a company is looking to procure goods or services, they may send out a request for quote (RFQ) or a request for proposal (RFP). Both RFQs and RFPs are tools that allow companies to gather information from vendors to make an informed decision about which vendor to use.

So, what is the difference between a request for quote vs. a request for proposal?

An RFQ is usually sent out when the company knows exactly what they are looking for and they are simply looking for vendors to provide a sales quote for the goods or services.

In contrast, an RFP is usually sent out when the company is looking for vendors to submit proposals for how they would approach a project. An RFP will typically include more detailed information about the project, including the company’s objectives and requirements. Based on the proposals received, the company will choose the vendor they believe is best suited for the project.

Why Your RFP Responses are Failing

On average, organizations win 44% of their RFPs. If a vendor has been responding to request for proposals but hasn’t had any success, it’s important to take a step back and assess why your RFP responses are failing.

There several reasons why an RFP response may not be successful, including:

• The proposal is too long and/or difficult to understand.
• The vendor did not accurately demonstrate its value proposition.
• The proposal does not address the specific requirements of the RFP.
• The submission is not tailored to the company/organization.
• The vendor does not have enough experience.

When writing a request for proposal response, it’s important to keep these potential pitfalls in mind. Vendors can increase their chances of success by ensuring that your proposal is clear, concise, and tailored to the company.

When a business fails to get enough responses from vendors or the quality of responses is poor, it may be time to re-evaluate the request for proposal process.

A few common errors in writing proposal requests include:

• Asking for too much information
• Not being specific enough about what is needed
• Failing to provide enough context
• Making the process too long or cumbersome

If a company is having trouble getting quality request for proposals, they should take a look at their request for proposal process to see if any areas can be improved.

Benefits of Using an RFP Template for CPQ Software

Whether you’re looking for CPQ software for the first time or upgrading your existing system, using a request for proposal template is a great way to compare CPQ vendors.

Since CPQ software is a complex and technical solution, it’s important to clearly understand your company’s specific needs before starting the search for a new system. A request for proposal template can help with this by providing a structure for vendors to follow when responding to your RFP.

In addition, using an RFP template can help ensure that all of the important information is covered in each vendor’s proposal. This can make it easier to compare and contrast different systems side-by-side, ultimately leading to a better decision about which CPQ software is right for your business.

When writing a request for proposal for CPQ software, be sure to include:

• An overview of your company and your specific CPQ needs
• A list of desired features and functionality
• An overview of your budget
• A timeline for the project

By including all of this information in your RFP, you can be sure that each vendor is on the same page and can provide you with a proposal that meets all of your requirements.

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