The RFP Process Timeline

The request for proposals (RFP) process is designed to assure you're picking the right supplier or third-party vendor before locking into a contract and is not a process to be rushed. Structuring yours takes diligence and foresight, plus sincere reflection on what high-functioning, ideal vendor relationships look like.

Use this step-by-step template as a resource when drafting your next RFP, attracting qualified candidates who may or may not be on your business' current vendor radar.

The RFP Process: What You Need to Know

Before diving into actual RFP process steps, let's peel back the layers of a successful RFP procedure.

1. What Is an RFP?

Companies issue formal requests for proposals when seeking a new supplier or vendor to work with. RFPs themselves are the documents used to seek and vet these prospective vendors, with vendors, in turn, drafting official bids based on the information in the RFP.

There are two parties inherent in the RFP process:

• Purchasers: Purchasers, or buyers, are the party in need of external services, products or expertise and initiating the RFP. Purchasers create RFPs internally after communicating a specific business case where third-party assistance or resources are required.
• Suppliers: Suppliers, also known as vendors, are the third-party organization writing bids to work with a purchaser. Suppliers use RFPs as the guiding source of direction and information to draft competitive bids, as well as review their qualifications for a contract.

2. Who Participates in RFPs?

Numerous types of organizations use RFPs to attract the most competitive project bids from contractors and vendors alike.

• Governments: Local, state, and federal agencies frequently conduct RFPs with private organizations to streamline, upgrade or improve equipment, technology or service offerings.
• Nonprofits: Nonprofit organizations use RFPs to update infrastructure and source new equipment for the organization, as well as for specialty contracting work.
• Private companies: Private businesses use RFPs to attract more competitive vendor bids and therefore manage a more cost-effective vendor ecosystem, typically for direct and indirect-spend commodities.
• Startups: Startups or new businesses may leverage RFPs to outsource functions it doesn't currently have the capacity for, as well as use the RFP process to widen its business network and assess overall vendor price points and service offerings.

3. Why Are RFPs Initiated?

At its core, an RFP gives suppliers a clear sense of what your organization is looking for across several business needs:

• You need new equipment or commodities.
• You're outsourcing key functions, such as IT or payroll.
• You want expert consulting.
• You're seeking fresh vendors, perhaps for product or service components, raw materials or functions of the supply chain.

Why Engaging in the RFP Process Matters

Creating RFPs is considered a best-practice during large expenditures or high-value purchases made by your organization. To understand why consider the unique advantages this type of vetting process delivers.

1. Compare Supplier Prices

RFPs provide the most precise way to price-compare vendors and contractors. While there are other methods to hear project or service quotes from contractors, such as a request for quote (RFQ), many fall short in delivering the detail and scope RFPs do.

What's more, RFPs communicate your exact needs and projections for your business case, then elicit direct, itemized estimates for those services. This improves cost-containment activities and assures your needs are fulfilled at transparent price points understood from the onset of the partnership, with no downstream surprises.

2. Compare Supplier Features and Services

Vendors bidding for your business will detail their product's or service's innate strengths, as well as how those strengths lend themselves best to your exact business case.

This provides a clear comparison between the competitive advantages of potential partners and contractors. Use bids to assess the overall functionality of a third-party against your needs, qualifying best-fit scenarios with the most accessible road to implementation, adaptation and ongoing support.

3. Understand Supplier Culture

Through multiple rounds of methodic applications and interviews, RFPs let your organization get a real sense of potential suppliers — not just the facade they present.

This is a distinct advantage to RFPs and something few other vetting processes cultivate. Your organization has more checkpoints to assess the quality and viability of each new partner, plus other important characteristics such as their friendliness, communication styles, openness to questions, response times and much more — key elements of a successful and functional business relationship.

4. Get a "Lay of the Land"

RFPs provide a space to survey new vendors and external business partners, particularly if you haven't audited your third-party contracts in a while. However, they're also a necessary internal process, helping organizations identify pressing projects and operational needs from those that can wait.

Plus, organizations arrange this business needs "lay of the land" in an informed, accurate and self-paced method, all on your own terms and schedule.

RFP Process Steps

The RFP timeline contains several key phases that, when appropriately orchestrated, give you confidence in your contracts.

1. Draft Your Business Case

Collaborate with stakeholders on the nature of the proposal requests. What are the goals of a new supplier or vendor? For example, are you outsourcing a business function you don't have the capacity for, in need of new office or storage space, or simply price shopping for the best possible service deals? Early collaborative sessions should also establish the RFP budget as well as consider additional tools or technology that must be implemented before receiving proposals.

Use the parameters of your business case to identify "must-haves" and "deal-breakers." This way, you can eliminate vendors who do not meet these standards based on measures everyone understands rather than subjective preferences. Contract must-haves and deal-breakers also help focus your search, giving everyone a clear sense of what to look for across the proposal process.

Stakeholders should also use business-case meetings and collaborative sessions to create the following documents:

• Evaluation categories: What are the key areas of concern we will judge suppliers on? These might be turnaround or implementation times, security or ongoing customer service, for example.
• Vendor scorecard: A written, standardized scorecard all stakeholders will use to grade supplier proposals. Vendor scorecards keep judgments objective and aligned with the pre-drafted evaluation categories.
• Proposal questions: The exact questions vendors or suppliers must answer on their bids.

2. Create Your RFP Template

One template ensures consistency and cohesion across the RFP process. You save time and energy working from one core set of proposal questions, and your vendors benefit, too. Templates go a long way in curating clear, organized calls for proposals. Your potential suppliers understand they're working with professionals under a uniform system, putting them on equal footing with other prospects and helping maintain the integrity of the contract procurement cycle.

Research sample RFPs in your particular industry. These examples can help inspire the kinds of questions to ask and vendor selection criteria to relay.

Ensure your own RFP template contains the following:

• A clear project summary with stated goals or priorities
• Up-to-date company information
• Your budget
• Proposed procurement and implementation timelines
• Specific vendor selection criteria
• Your RFP point of contact

3. Confirm NDA With Interested Suppliers

Drafting non-disclosure agreements (NDAs) is an essential preliminary step before moving on with likely suppliers.

Under the nature of these service contracts, your organization could share confidential and proprietary information with an outside entity. NDAs assure the privacy of that shared information, stating liabilities and protecting yourself against leaks or mishaps, even if they're unintentional.

Relay your need for NDAs with all participating vendors as soon as possible, plus give them go-to individuals to contact with questions or follow-up. Suppliers should commit to NDAs in a reasonable time frame, typically within a deadline you communicate. Those who don't or drag their feet may be cause for concern.

4. Distribute RFP Documents

After receiving non-disclosure agreements, send participating suppliers your official RFP. Your request for proposal should, at a minimum, elicit the following from vendors:

• List of relevant products and service offerings
• Their delivery action plan
• A projected timetable of completion
• Itemized price estimates
• Deliverable schedule

Allow plenty of time for vendors to review documents and draft their pitches. At this stage, a supplier may bow out of the running, realizing they're not qualified for the project or don't meet certain standards stated in your RFP template. You may even consider a second opt-in deadline, one relayed after the NDA exchange but well before the proposal deadline, ensuring only suitable vendors submit bids.

Note that your RFP documents are different than RFQs. The two are often conflated yet serve two distinct purposes. Requests for quotes only solicit a project or service price estimate. RFPs elicit a more complete, thorough portrait of a new supplier relationship.

5. Collect Proposals

Set a hard proposal deadline. All vendors wishing to make a bid must submit their completed applications by this date to be in the running.

Timelines for collecting supplier proposals will vary. Depending on the scope of your project and the nature of your business case, you might give suppliers anywhere from 30 days to two to three months to submit bids. Some proposal periods — such as those for major government projects — have been known to last even longer.

Meanwhile, ensure open lines of communication with vendors well before the proposal deadline. They may reach out to ask for clarity or details on certain project parameters, which you should answer promptly to maintain good faith.

6. Shortlist Submissions

Shortlisted submissions constitute your top vendor contenders. You and your stakeholders identify your shortlist after grading proposals against your scorecard — the one created in Step One — as well as noting vendors' unique strengths and risks. You may also consider running your shortlist past a third-party procurement expert. Procurement consultants and similar experts can review all or select proposals, ensuring the strength and viability of your finalists.

Immediately following your internal shortlisting period, make sure to:

• Notify suppliers: Shortlist lengths will vary, but typically include two to four finalists. Reach out to those who've advanced as well as suppliers who didn't make the cut.
• Confirm next-round deadlines and requirements: Set up interviews and request any additional information from remaining suppliers. Inform finalists exactly what you're expecting in these upcoming meetings and reiterate contract must-haves and deal-breakers.

7. Conduct Deeper Research

At this stage of an effective RFP process, the goal is to delve deeper into each supplier's strengths and risks, the ones they've indicated in their proposals as well as lingering questions you may have.

There are several strategies to vet future suppliers beyond their written RFP bid:

• Individual meetings: Set up individual meetings with each of your shortlisted vendors. Invite all stakeholders to attend, letting each review, validate or follow-up on certain bid statements as well as address potential action plan concerns.
• Additional research: Contact client references, perform social listening research and look at customer reviews to get greater visibility across the vendor's reputation.
• Request demos: If possible, negotiate product or service demos to experience the vendor's work first-hand.

8. Select Your New Supplier or Vendor

Conduct your final round of scoring, this time taking into account the complete portfolio of information you now have on vendors:

• Transparency and openness when working with the vendor across the entire timeline
• Cohesion between the vendor's written proposals and the vendor's statements during meetings or interviews
• Vendor quality and composure during meetings or interviews
• Actual customer or client reviews
• Online reviews and wider social-listening testimony
• Ability to commit and adhere to deadlines
• Overall adherence with your proposal's guiding evaluation criteria

Most procurement endeavors have an appointed project leader. It's that leader's responsibility to round out the final selection process, assuring all stakeholders cast their votes and have their opinions heard. In some cases, the procurement project manager may even get the final say on the supplier to go with — though, at this stage, disagreements are rare given the wealth of amassed information.

9. Communicate Your Selection

It's finally time to notify your new supplier they've been selected.

Start that agreement on the right foot by solidifying the following in your early contract negotiations by outlining the operating relationship between you two.

• Distinguish clear roles: Outline clear service agreement clauses, stating who's in charge of what in your new business arrangement. You may additionally consider an order of preference clause, which ranks contract provisions and responsibilities in order of importance to assess hierarchies, reduce confusion, and set service timelines.
• Set expectations: Consider creating key performance indicators (KPIs) that will measure supplier deliverables. KPIs objectively temperature-check your new supplier's performance, maintaining clear lines of accountability.

You'll also want to communicate with the chosen supplier internally. Let stakeholders and their teams understand the selection, as well as the reasonings for picking the partner you did. A transparent look into the contract decision helps increase employee buy-in behind the entire process.

10. Tie Up Legal Ends

The final stages of the RFP timeline solidify the legal details inherent to purchaser-supplier business arrangements. In particular, you'll want to formally review and instate contract language or policies on:

• Material claims and losses
• Rights of access to facilities, vehicles, infrastructure and more
• Confidentiality clauses
• Additional insurance
• Mandatory compliance and industry requirements

Congratulations! You've now completed a successful RFP. Cheers to your mutually beneficial new partnership.

Create Your Best RFPs

Dryden assists in individual RFP-related functions as well as overall RFP creation and execution, including:

• Spend assessments
• RFP template creation
• Contract negotiations
• And more

Get in touch with our procurement and spend experts today to start crafting strategic, cost-effective, and successful RFPs today.