Anatomy of an RFP
An RFP is a tool a buyer uses to purchase from a supplier many types of products or services, such as software programs; corporate computers systems; administrative, technical, or legal services; machinery; medical supplies; and many other types of products. Each type of purchase requires a different RFP. This guide provides a suggested structure for building your RFP.
Broadly speaking, a basic RFP consists of the following sections:
A project overview and administrative information section contains an overview or summary statement of the problem, similar to a proposal's executive summary, as well as the administrative information concerning the management of the RFP.
A technical requirements section provides suppliers with technical requirements and enough information to enable them to understand the issues and write a firm proposal.
A management requirements section states the conditions for managing and implementing the project.
A supplier qualifications and references section asks the supplier to describe qualifications and list references.
A suppliers' section allows suppliers to include information they feel is relevant although not required or requested in the RFP.
A pricing section specifies how suppliers are to provide pricing information.
A contract and license agreement section contains the purchase contract, nondisclosure agreements, and other legal documents.
Appendices contain bulky but relevant information such as network diagrams, technical requirements studies, and project plan outlines.
Figure 1.4 provides a "roadmap" to the typical sections of an RFP. This is a suggested roadmap only; you may choose, for example, to fold the supplier's qualifications and references into the management section or not to include a supplier's section. However, Sections 1, 2, 3, and 6 in the figure below should be considered the minimum sections of an RFP. Always consider using appendices when providing additional information that supports the primary sections.
The following paragraphs describe what constitutes an RFP. Subsequent chapters will expand upon the ideas presented below.
Figure 1.4 RFP Roadmap
Project Overview and Administrative Information
The first part of this section provides suppliers with an overview of your company and a statement of the problem that you hope to resolve through this RFP. The statement of the problem must be detailed enough for suppliers to grasp both the business issues that are driving the RFP and the technical issues that may have precipitated the problem.
The administrative section contains the RFP's rules for the road.
The administrative section contains all of the administrative requirements and information with which a supplier must comply in order to submit an acceptable proposal. The administrative section also provides the ground rules for the procurement, from receiving the RFP to awarding the contract. This section should contain the following types of information:
if and when a bidders' conference will be held
relevant dates for the procurement
requirements for preparing proposals
how proposals will be evaluated
RFP contact names and addresses
other information that is required for a supplier to be responsive
Administrative requirements are very important to keep suppliers moving forward with their proposals in a timely manner. If the instructions are missing or not clear, suppliers may overlook important meetings or milestones. For perceptive suppliers, lack of instructions may signal a weak RFP team and a confused or conflicted project. This potential weakness may influence whether they decide to continue with their proposal.
On the other hand, failure to comply with the administrative requirements might be cause for rejecting that supplier's proposal. The purpose of this section is to lay down clear rules for responding to the RFP and to ensure that suppliers are aware of the penalties for not following them. If a _supplier fails to abide by these rules, it may be a sign of carelessness and lack of attention to detail.
Section 3, RFP Administrative Section, covers this topic and provides examples of typical administrative requirements.
Requirements are the heart of the technical section.
This section contains all of the information and requirements needed to enable suppliers to respond to your RFP. It should first summarize the problem or issue that is the basis for the RFP. This overview should address both the current business application and the technical environment (hardware, software, communications).
Following the problem statement, the rest of the section lists the requirements to which a supplier must respond in the proposal, for example:
critical success factors
functional specifications for the current system
functional specifications for the projected system
hardware requirements (if mandatory)
communications requirements (if mandatory)
This section must be well documented and complete; otherwise, suppliers will have to ask questions in order to clarify statements or requirements.
The project plan is the heart of the management section.
This section provides suppliers with the information they need to develop a project plan that will cover the implementation, installation, training, maintenance, and other aspects of the project. The proposed project plan provides the needed assurance that the supplier has the resources required to perform the contract successfully.
The project management plan typically contains the following:
Site preparation responsibilities.
Delivery and installation schedule and plan.
System acceptance test requirements.
System maintenance requirements.
System training requirements.
Development of this section is essential for ensuring that suppliers can meet the overall project requirements. It is possible that suppliers can meet the technical requirements but cannot meet the management requirements as evidenced in their poor or inadequate responses to the requirements in this section. It is possible that a company has put all of its energy into product development and little or no effort into determining how the product should be installed and maintained, specifying what type of training is needed, and providing good readable documentation. The management section will help you to differentiate the suppliers with good management capabilities from those with little management capability.
Supplier Qualifications and References
Supplier qualifications provide financial data, while references provide the "who," "what," and "where."
The supplier's qualifications and references are as important as the technical and management requirements. This section requires suppliers to provide information about their company and financial status and the customers who will serve as references for their proposal effort.
It is important not to bury this section and to ensure that suppliers do not take it lightly or simply say that the information requested is already provided in their annual report.
The following are examples of what is typically required in this section:
The supplier's installation and maintenance offerings and capabilities.
A description of the relationship between the supplier and each manufacturer, and how long this relationship has been in existence.
Evidence that the supplier has the necessary technical skills, technical staff, and financial resources to perform the contract.
A list of the currently installed systems.
Names of customers with similar configurations and/or applications who can provide references, including contact names and telephone numbers.
It is impossible to say how many times I have had to scramble when asked for information about a particular supplier. Invariably, at least one person will ask for information that was not requseted or was not provided in the proposalsthus forcing me to read annual reports, search Web sites, or call the suppliers to get the information. Therefore, I encourage you to review Appendix B and add it to the list of questions. Ensure that this type of questionnaire is in your RFP. Consider making it a separate section in the RFP so that the information is consolidated into one area.
This section reserves a place in the RFP for suppliers to provide information that they feel is necessary but was not requested. Suppliers can also discuss potential issues that are relevant to the RFP and to their proposal. For example, a supplier may have additional product features to demonstrate that are outside the scope of the RFP. Suppliers may also comment on requirements they feel are missing from the RFP, or present a unique solution that was not anticipated by the buyer.
This section is also an appropriate place for suppliers to discuss issues they believe are relevant to the project that have not been covered in the RFP. The RFP's instructions to suppliers will direct them to use the suppliers' section for any additional information outside the scope of the RFP.
Remember to take notes from ideas provided in this section. A supplier might provide a solution to a problem evident in the RFP that other suppliers did not consider. Even if this particular supplier does not win, the explanation of the problem and the potential solution will still be worth considering for use with the winning vendor.
The pricing section gives suppliers a format to follow when pricing their proposals.
This section provides a detailed format for suppliers to follow in developing their price proposals. Instructions should be in a clear format to ensure that price proposals from different suppliers can be compared on an equal basis. To facilitate this comparison, you may consider providing a sample spreadsheet that breaks the proposed system into components such as the following:
Application development software.
Integration of unique hardware or software.
License fees (ongoing).
An area deserving of particular attention involves onetime costs versus recurring costs. The initial price of a software package is a onetime cost; annual maintenance and software licensing fees are recurring costs. Recurring costs need to be identified if you are developing a life-cycle cost for a project that is expected to have a valid life of ten years.
Pricing is not usually the sole determinant for winning but should be used to break a tie between two suppliers with equally good technical and management proposals.
Contracts and License Agreements Section
Provide contracts in your RFP to get the ball rolling.
This section provides basic guidance to the supplier on how to respond to contracts and agreements. It can either become part of the pricing section or stand alone.
Contracts are provided to suppliers, who can begin to study them along with the RFP requirements. If contract provisions are such that suppliers cannot respond, suppliers may either choose not to bid on the RFP or take exception to the contract provision in their proposal. For example, a contract may state that custom software products must pass a 90-day acceptance test period prior to the first payment. A supplier may agree to only a 30-day test, or may not agree to any acceptance test that is tied to payments.
Identify showstopper issues during the proposal evaluation period because it is possible to select a supplier who will not accept your contract. Do not spend time and resources on an unproductive supplier, as this takes time away from working with the potential winners.
Types of contracts can include the following:
software license agreement
Place detailed information in an appendix.
If the RFP team generates detailed information that is too lengthy for the body of the RFP, place it in an appendix. Examples include the following:
Spreadsheets with statistical information.
Communications network drawings and plans.
List of current equipment.
Standards used within the company.
Tentative project plan with dates.
The information is then available to the supplier but does not distract from the narrative portion of the RFP. Note: Tell suppliers whether they must use this information when developing their proposals.
Consider making information available to suppliers via a Web site established for your RFP. You may be able to supply more examples of documents, workflow diagrams, network diagrams, and other related information that would be costly to reproduce and bind with the RFP.