A Request for Proposal (RFP) is how organizations make big purchases. Companies, government agencies, and other groups use RFPs to compare features, functionality, and pricing across potential vendors. A good RFP process also lets key stakeholders join in choosing and evaluating vendors.
Many organizations have messy RFP processes. They rely on email threads with attached Excel and Word documents, making it hard to manage both people and data. This guide will help you create a structured, effective RFP process that gets better results.
The four key phases of the RFP process
1. Discovery phase
The discovery phase creates the foundation for a successful RFP process by clarifying what your organization needs.
Start by identifying everyone who will be affected by the RFP outcome. Schedule internal meetings to discuss business goals and set a budget. Define what matters most in your evaluation and what would be deal-breakers. Figure out what tools you'll need before starting.
For example, a mid-sized healthcare provider looking for a new patient management system would bring together people from clinical staff, IT, finance, and administration. In their meetings, they might decide that HIPAA compliance is non-negotiable, while connecting with existing electronic health records is a high priority.
2. Draft and issue phase
After discovery, it's time to create and send out your RFP document.
Write specific questions that help evaluate vendor capabilities. Include open-ended questions to see how vendors think. Clearly tell vendors about timelines and what you expect. Set up a way for vendors to ask questions if they need clarification.
Your RFP should include sections about your company background, project goals, specifications, timeline, budget constraints, and how you'll evaluate responses. Use different question formats to gather complete information. Set reasonable but firm deadlines that give vendors enough time to create good responses.
3. Score and shortlist phase
Once you have vendor responses, evaluate them against your criteria.
Have your team review and score the responses. Remove vendors that don't meet your must-have requirements. Identify what makes the remaining vendors stand out. Create a shortlist of the top candidates.
Use a consistent scoring system for each question or category. Give different weights to sections based on how important they are to you. Use tools that help combine scores from multiple evaluators. Write down specific strengths and concerns about each vendor.
4. Select winner and contract phase
The final phase involves deeper evaluation of your shortlist and negotiating with your preferred vendor.
Ask for more information or demonstrations if needed. Check reviews and talk to references. Negotiate terms with your top choices. Finalize the contract with your chosen vendor. Let non-selected vendors know your decision.
When negotiating, focus on building a relationship, not just getting the lowest price. Make deliverables, milestones, and success measurements clear. Define how you'll handle changes in scope. Establish how you'll communicate going forward.
Common RFP challenges and solutions
If your requirements are unclear, spend more time in discovery with all stakeholders before drafting the RFP.
When vendor responses are poor, create clearer questions and provide enough context about your needs. Let vendors ask questions before submitting.
To avoid bias in evaluation, establish objective scoring criteria before reviewing responses, involve diverse stakeholders, and use a consistent scoring system.
If the process takes too much time, consider using RFP software to streamline creation, distribution, evaluation, and management of RFPs.
Using technology for RFP success
Modern RFP software can greatly improve efficiency. These tools offer content libraries, collaborative workflows, AI assistance, and integration with your existing systems.
Beyond the basic RFP process
It helps to understand the differences between procurement documents:
- A Request for Information (RFI) gathers general information, often before an RFP
- A Request for Proposal (RFP) seeks detailed proposals for complex products or services
- A Request for Quotation (RFQ) focuses on pricing for standardized products or services
Choose the right format based on what you're buying and how complex your needs are.
Conclusion
When done right, the RFP process provides a systematic approach to procurement that leads to better business decisions and stronger vendor relationships. By following the four key phases—discovery, draft and issue, score and shortlist, and select winner and contract—your organization can streamline procurement and select vendors that truly meet your needs.
The best RFP processes balance structure with flexibility, involve the right people throughout, and use appropriate technology to manage complexity. With practice, your RFP process can become a competitive advantage, ensuring you get the most value from vendor relationships while minimizing risk.
Frequently asked questions
What is an RFP process?
The RFP (Request for Proposal) process is a systematic approach that enables organizations to evaluate potential vendors for significant purchases. It serves as the cornerstone for companies, government entities, and organizations to compare features, functionality, and pricing across vendors while ensuring key stakeholders can participate in vendor selection and evaluation. The process consists of four key phases: discovery, draft and issue, score and shortlist, and select winner and contract.
What are the 7 steps in an RFP?
1. Identify stakeholders and clarify organizational needs (Discovery)
2. Define evaluation criteria and requirements (Discovery)
3. Create and compile RFP questions and documents (Draft and Issue)
4. Distribute RFP to potential vendors (Draft and Issue)
5. Review and score vendor responses (Score and Shortlist)
6. Create a shortlist of top candidates (Score and Shortlist)
7. Select winner, negotiate terms, and finalize contract (Select Winner and Contract)
What are the 3 sections of RFP?
1. Company background and project goals
2. Specifications, timeline, and budget constraints
3. Evaluation criteria and response requirements
What is the difference between RFP and RFQ?
An RFP (Request for Proposal) is a comprehensive document seeking detailed proposals for complex products or services. In contrast, an RFQ (Request for Quotation) is a more specific request focused primarily on pricing for standardized products or services. RFPs are used when the solution may vary between vendors and requires detailed explanations, while RFQs are typically used when the requirements are clearly defined and the main differentiator is price.