An RFP (Request For Proposal) process is a vital part of any procurement organization or team. It entails the various steps that are employed in procuring goods and services; right from identifying the procurement needs of the organization to receipt of the goods/services.
As a procurement manager, you want your RFP process to be smooth and seamless, fair and effective for arriving at the right vendor for each procurement you handle. It certainly can be a delicate process and would take some expertise to handle professionally whilst ensuring you achieve your goals.
Here are 6 steps that are included in an RFP process. They are:
📍Needs Determination: This involves identifying key details such as the specification of the goods/service to be procured, expertise needed, KPIs/criteria/goals to be met, and timelines for delivery. The process of determining the needs of the organization will give you a good understanding of the good/service you are procuring and this would help you put together your vendor list for the RFP; limiting it to the most qualified vendors that can meet your organization's needs.
📍Writing the RFP: RFPs usually follow a particular format with key elements like instructions to the tender, the scope of work, proforma contract and bid terms and conditions included. The RFP document is critical because it is used to communicate your expectations to the vendor(s). And it will be used by the vendors to create their proposal response.
📍Issuing the RFP: When issuing an RFP, you send the document to a sizeable amount of vendors so you don't end up with too few responses. At the same time, you want to avoid sending it to too many vendors so you don't end up getting overwhelmed. There are also key processes for distribution of RFP, as well as seeking and giving clarifications, that preserve the competitiveness and fairness of the process.
📍Evaluating Technical Responses: This can be quite a tasking exercise especially when dealing with a large number of bid responses. It will sometimes involve a physical inspection of vendors' worksites and/or facilitie; and is an important step for narrowing down the vendor list to only qualified vendors who successfully pass your pre-determined selection criteria.
📍Commercial Evaluation: This is where you closely examine the commercial bids of the technically qualified vendors. At this point, vendors' pricing and other commercial conditions would be considered. Commercial bid evaluation is usually a precursor to the selection of a preferred bidder and must be conducted carefully.
📍Decision making: At this point, the most suitably qualified vendor that can deliver the goods/services as specified, and at the best possible price is chosen. Sometimes, you may want to call for a negotiation with the preferred vendor before signing off a formal contract.
If you need help developing RFPs and scoring criteria, bidding, or conducting bid evaluations; simply visit Efemini Academy to explore our range of online procurement courses and resources. And begin your journey to becoming a Procurement Expert!
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