If there comes a time when my company needs to deal with a third party to deal with some part of the business, we turn to the procurements department to deal with the point of contact and to get the proposal process started. There are also a number of companies this can be outsourced to, depending on the companys needs.
The procurements department has the responsibility to review all the companies in contention and make the best recommendation they can. If a company can pass this initial screening test they will be asked to submit a formal proposal. Previously, we never specified what kind of format was used, we just wanted them to answer certain questions and show they were capable.
But now that has all changed. I have been recently informed that the procurements department was looking for someone to handle inbound data. That was all well and good, but then they asked if potential companies should submit a proposal by EOI, RFP, or RFT.
EOIs, or Expressions of Interest, are great for a company that is requesting help with a specific problem, but dont know exactly how to resolve it. In other words, there is a problem that needs fixing, but youre not what it will take to get it fixed. An EOI provides solutions to the problem as well as the cost to take care of it.
Request for Proposals (RFP) " are used to purchase goods and services directly from a third party vendor. An RFP will include a solution on how to solve your problem. The better RFP will provide you with more than one solution. The document will include different options which will be priced accordingly. This will provide you with the flexibility you need to fix the problem, and have room in case anything else develops. This form of proposal is more common with consulting services or in the information and communication technologies field.
Request for Tenders (RFT) " is used to provide a specific solution to a particular problem. The proposal is asking each potential company one question. There is limited room for flexibility and creativity. This proposal format is used more in the building and construction industry. A superb example of an RFT would be a request to add two bathrooms on to a house. The differences will be in design, materials and pricing.
For my particular problem, Im going to need a lot of flexibility before it is solved. Thats why, in the end, I decided to ask the procurements department to gets requests for proposals from all the top contenders.
The amount of time it takes to complete a RFP process will depend on how thorough you want to be. If you are just looking for the lowest price, then your RFP will be one way to drive cost down.
