REQUEST FOR
PROPOSAL/QUOTE
Lesson 1
Cost and Contract Management
EB300
RFP:
REQUEST FOR
PROPOSAL
What is it? Why is it used? Who uses it? How is it implemented?
What is an RFP?
◦ A business document that announces and provides details about a project, as well as solicits bids from
contractors/consultants who will help complete the project
◦ These requests specify the nature of the project and the evaluation criteria disclosing how proposals are
graded. Requests may include a statement of work, describing tasks to be performed by the winning
bidder and a timeline for providing finished work. They also include information on the issuing
organization and its line of business.
◦ RFPs also guide bidders on how to prepare proposals. They may outline instructions on what information
the bidder must include and the desired format.
◦ They are generally reserved for complex projects
Who uses an RFP?
◦ They are primarily used by government agencies
◦ They can be used by anyone who wishes to use a bidding process to hire a contractor to complete a
project
Why use an RFP?
◦ Government agencies or other entities may be required to issue requests for proposals to provide full and
open competition to drive down the cost of a solution
◦ Allows the owner to invite selected contractors to bid
◦ Provides standardized information about the project to all contractors who are bidding
◦ Generates standardized proposals from all contractors
◦ Provides a deadline for proposals from contractors
◦ Generally, provides owners with the lowest and most competitive bid for the project
◦ The reason an organization may put out an RFP is to get multiple bids. The seeking organization may
benefit from multiple bidders and perspectives. For example, a business that wants to change its
reporting process from a paper-based system to a computer-based system may put in a request for
proposal for hardware, software, and user training to establish and integrate the new system into the
business.
How is an RFP implemented?
◦ The owner of a project decides on a project and prepares an RFP
◦ The owner sends the RFP to a select group of contractors who are invited to bid or makes the RFP public
and available for open bidding. ([Link], [Link])
◦ For large construction projects contractors, may be invited or mandated to visit the project site to gather
information and ask questions. (This is also an opportunity for contractors to understand the competition
for the project which can influence bidding decisions.)
◦ There is a Request For Information (RFI) deadline after which further inquiries for information are denied.
Answers to RFIs are shared with all bidders, not just the contractor who submitted the RFI. This creates
equity in bidding.
◦ Addendums to the RFP can be issued by the owner
◦ Contractors must submit Proposals by the deadline indicated in the RFP
◦ The owner may select a small group of bidders and enter negotiations on pricing and technical details.
The owner may ask the contractors to submit a best and final offer before awarding a contract.
◦ The contract is usually awarded based on a ranking system by a date indicated in the RFP. Price,
company profile and experience with previous work, and technical expertise are usually highly ranked.
REQUIREMENTS OF
AN RFP
What Parts to Include
Overview
Skillfully creating a request
for proposal may dictate
the success or failure of the
resulting solution. If specified
requirements are too
vague, the bidder may not
design and implement a
complete solution for the
problem. If the requirements
are too detailed and
restrictive, the bidders’
creativity and innovation
may be limited.
1. Owner Contact Information
Contact
Complete Telephone
Name person for
address number
RFIs
Internet E-mail
Fax number
address address
2. Project Information and Background
PROJECT TITLE PROJECT PROJECT PROJECT KEY
LOCATION SCOPE DELIVERABLES
3. Proposal Submittal Process
◦ Includes information such as:
• Submission cut-off date
• Method of submission, paper vs
electronic
• Location for paper submission
• Notification process for successful
and/or unsuccessful proposals
4. Protest Process
Outlines the process
How to submit a Sufficient criteria
for proposal
protest, in writing or that must be met to
submitters to protest Protest deadline
via electronic permit a protest
the selection
submission method submission
decision
Time requirements Person who will Any appeal options
The protest review
for a response to a respond to the to the submitted
process
submitted protest submitted protest protest, if any
5. Proposal
Criteria for evaluation. Typically, price, Review
contractor qualifications, and
contractor experience are rated highly. Process
Who will be evaluating the proposals
Negotiation process for changes to the
proposed work, method, or
compensation amount
This is what the owner creating the RFP
expects to see in submitted proposals 6. Proposal
Content
This may include:
• Cover Letter
• Background of the Contractor Firm
• Statement of Understanding and Approach
• Understanding of the Scope of Work
• References
• Additional Information that may be included
• Cost estimates and consulting fee
Lists of background documents Services
that will be provided to all bidders
(site plan, drawings etc.) Provided by the
Owner
Support that will be provided
during the project
Personnel who will be contacts
during the project phase (typically
the owner’s project manager)
Whether costs for creating a
proposal will be provided Additional
Information
Rights reserved by the owner
How changes to the RFP will
be dealt with
Conflicts of
Interest
What conflicts of interest
are permitted
Declaration of conflicts of
interest are usually
required
Insurance
Requirements
What types of insurance
need to be purchased by
the contractor
The amount of each type
insurance required
Appendices
Usually documents to filled out and included in the
proposal
Can include fee schedules, drawings, sketches,
equipment specifications, etc
Legal documents