Explain Request proposal method

FinanceFinance ManagementBanking & Finance

Request proposal method is a document, which explains the project, asks for bids from contractors. In this, both technical and financial proposals are submitted in separate envelopes.

Technical proposal is evaluated first and points are awarded according to the pre evaluation criteria. After attaining minimum or qualification marks, only technical proposals are evaluated. Averages of two proposals are calculated and a contract will be awarded to the bidder who gets the highest points.

Company will collect information about suppliers. Sometimes, companies will send requests for proposal documents to selected suppliers. Suppliers will send their pricing, capabilities and their uniqueness among competitors.

After reviewing each proposal, the company will look for a supplier who meets their requirements. Negotiations are allowed in this method.

Elements of RFP

Organizational overview − Short description of company’s missions and projects.

  • Project goals − Identifying goals of the project. This will help to understand needs of organization and also helps to fill the system that offer support to organizational goals.

  • Target audience − Describes project deliverables and audience.

  • Project deliverables and specifications − Major components like each component design; support services etc. of projects are identified. The more the details, the more accuracy in cost estimation.

  • Project requirements − Describes guidelines of project and administrative requirements which includes completion dates, project testing, evaluation, intellectual property rights, billing requirements etc.

  • Proposal format − Elements like budget, cost breakdown per deliverable, tasks and timeline, roles and responsibilities, vendor description are described.

  • Request for reference − Information related to long term or recent clients, contact information etc.

  • Proposal delivery instructions and contact information − Covers topics like to which proposal was addressed, number of copies, mode of delivery, point of contact etc.

  • Proposal evaluation timeline − Communication between vendor and organization.

Advantages

The advantages of the request proposal method are as follows −

  • Potential suppliers.
  • Suppliers' information.
  • Fair chance for bidders.
  • Negotiations are allowed.

Disadvantages

The disadvantages of the request proposal method are as follows −

  • Takes more time, a long process.
  • Focusing only on one criterion.
  • Lack of clarity.
  • Sometimes, there is a chance of communication gap between company and bidder.

Examples

The examples of the request proposal method are as follows −

  • Quality based selection.
  • Fixed budget selection.
  • Least cost selection.
  • Quality and cost based selection.
raja
Published on 17-Jul-2021 16:24:25
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