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A proposal request is a written solicitation by a for-profit or non-profit firm or a government to service providers and contractors alerting them that a buyer is entertaining bids for business. It is a formal document, outlining specific requirements for a project or service, and it is made available to potential participants in the endeavor. A request for proposal (RFP), as it is also known, attracts interested parties that meet certain evaluation criteria to apply for the job at hand.
Businesses or a government might issue a proposal request for various reasons. An RFP may be issued by a pension fund manager deciding on which investment adviser to hire to manage a portfolio. A company might issue an RFP when it is searching for a consulting firm to advise it through an important company event, such as a consolidation. A government may issue a RFP for certain projects, such as when it is accepting bids from independent aerospace and defense contractors for mandates.
The RFP should remain highly specific so that only qualified parties apply, and the form is typically multiple pages in length. Clarity in the proposal request is essential so that the objectives for an assignment are clearly conveyed and expectations are met. If certain aspects of the document remain unclear, a supplier has the right to request additional information. A proposal request is an opportunity for buyers and suppliers to familiarize themselves with one another, and to ensure from the onset that both parties are adhering to the same criteria and deadlines.
There are often several phases and layers of paperwork tied to the highly competitive proposal request process. The first of those steps is pre-solicitation, where the number of entrants is streamlined. After the pre-screening, the evaluation process begins and multiple committees are assigned to consider the shortlist of suppliers. Price is important in the evaluation process, although it is not the only criteria used. A buyer must find a supplier that not only fits the budget, but that compliments the buyer's strategies and objectives.
In the final phase, a letter of intent and an award letter are rendered to the winner and rejection letters are dispersed to the other applicants. A contract is awarded to a supplier that most closely meets a buyers budget and criteria. The issuer of a proposal request should implement milestone dates and deadlines associated with each phase of the project.