A Request for Proposal (RFP) is a formal document that organizations use to solicit detailed proposals from vendors for complex projects or services, a process that can be quite lengthy—a Gartner study found that customers can spend 16.3 months on average to seek and evaluate technology solutions. This guide covers everything you need to know about creating effective RFPs, their benefits, and best practices.

When your organization needs external expertise or services, choosing the right partner is critical. RFPs help you make informed decisions by standardizing the vendor selection process and ensuring you get the best value for your investment.

What is a Request for Proposal (RFP)?

A Request for Proposal (RFP) is a formal procurement document that organizations issue to invite vendors to submit detailed proposals for specific projects or services. It outlines project requirements, evaluation criteria, and submission guidelines to facilitate fair vendor comparison.

RFPs create a standardized bidding process that helps businesses compare vendors objectively. This reduces risks and ensures you select the most qualified partner for your project needs.

RFP vs. RFQ vs. RFI: Understanding the Differences

In procurement, RFI, RFP, and RFQ each serve a distinct purpose at different stages of vendor selection.

Request for Information (RFI)

Purpose: Gather general market information
When to Use: Early exploration or vendor research phase

An RFI is a preliminary document used to collect broad information about available solutions and providers. It helps organizations understand the market landscape and develop a shortlist of qualified vendors.

Request for Proposal (RFP)

Purpose: Solicit comprehensive solutions
When to Use: For complex projects requiring detailed approaches

An RFP is issued when an organization needs vendors to propose strategic, tailored solutions to a defined business challenge. It focuses on methodology, capabilities, and cost, evaluating both the “how” and the “how much.”

Request for Quote (RFQ)

Purpose: Request pricing for specific items or services
When to Use: When project requirements are fully defined

An RFQ is used for straightforward purchases where specifications are already clear. The emphasis is on pricing, payment terms, and delivery details, not on strategy or creative problem-solving.

Summary

• RFI → Exploration: Understand the market and potential vendors.

• RFP → Evaluation: Solicit detailed, strategic proposals.

• RFQ → Selection: Compare pricing for well-defined needs.

Together, these documents form a complete procurement process that moves from information gathering to solution evaluation and finally to vendor selection.

What are the benefits of using RFPs?

Leveraging RFPs is a great way to improve your organization's success rates with vendor partnerships. For instance, statistics show that 33% of company sales revenue is generated through deals initiated by RFPs.

Here are some key benefits of using RFPs:

• Account for complex considerations: There are generally always several complex factors to consider when undertaking a high-value project or purchase. By issuing an RFP to potential vendors, you can consider all these essential elements in the selection process. Then, you can compare which vendor ticks your priority boxes — whether for technical abilities, security competence, or experience levels — and to what extent. The best part is the RFP helps you compile all these details into one document.

• Access vetted solutions: Another advantage of the RFP is that it provides you with real-time insight into each vendor's actionable plans, not just the stuff on their website. Since service providers have to submit a formal pitch, they typically take the time to outline a practical solution to the specific issue you're trying to solve — not just a generic copy/paste bid.

• Remove bias: For many government agencies—which purchase around $665 billion in goods and services annually—issuing an RFP is regulatory as it presents a transparent and auditable document of decision-making. As a private business, an RFP will also help you stay objective and eliminate bias. Since you'll be getting standardized data from potential suppliers, making an objective decision on your ideal candidate becomes easier.

• Wider pool of vendors: Another advantage of issuing RFPs is that it allows you to go beyond your existing network of providers, potentially exposing you to better and more efficient vendors. While staying within your network feels comfortable, you may be missing out on improvement in the deliverables you get.

• Competitive pricing: RFP documents are typically associated with high-value projects. As a result, partnering with the right company is crucial to keep your costs as low as possible while getting excellent value for your money. Since vendors know that the RFP system is competitive, they are more likely to present their best offers, which can lead to product and service costs being reduced by 10 to 25 percent.

• Save time: Finally, publishing an RFP can help you save valuable time you'd have otherwise spent looking for vendors and then reaching out to them. Instead, an RFP positions you as the prize, allowing vendors to come to you.

So, how do you create an RFP that effectively communicates your needs while ensuring you get relevant information from potential vendors?

What are the steps involved in creating an RFP?

Here's a detailed step-by-step guide to helping you create an RFP that works:

1. Include relevant company information

Provide detailed company information to give vendors context for tailored proposals. Include your background, industry, and specific requirements.

Request similar information from vendors:

• Background and experience: Relevant project history and expertise

• Location and stakeholders: Geographic presence and team structure

• References: Past performance on similar projects

2. Outline project objectives

Next, you want to ensure that you clearly outline a project overview. It is important to make this executive summary as clear as possible so that contractors responding to RFP understand what success on your project means and what their deliverables should be.
Here are some details your project objectives should have:

• Business case: This includes a full overview of your project, its purpose, and the targets you've set.

• Timeline: You should also include details on your overall timelines, including specific start and end dates.

• Milestones: Milestones are checkpoints that help you identify how much work has been covered at specific points on your project timeline.

• Budget: While precise budgets may be unattainable, providing a specific range can help guide the plans and strategies of vendors who submit responses.

• Deliverables: You should also clearly outline the tangible outcomes you expect in the course of your project.

3. Establish project requirements

Another key component of your RFP documents is your project requirements and scope of work. This may include details, like NDAs, budget limits, and governmental regulations, that you'll need bidders to either sign off on or comply with.

It is important to be upfront about this information so that potential vendors can decide upfront if the terms and conditions work for them. They can also decide if the project is one they can handle or not.

For instance, imagine buying a fleet of specialized hospital equipment only to find out too late that the vendor is not licensed to provide ongoing maintenance services.

4. Structure vetting criteria

While your selection criteria seem like a detail you don't need to share with potential vendors, it can help you ensure you get only the best and most relevant bids.

By clearly defining the criteria that you'll use to vet and evaluate vendors, you highlight the elements that matter most to you, prompting responders to refine their answers on critical deliverables. Research shows that altering the selection criteria can significantly influence vendor proposals and increase the use of desired materials or approaches. This ensures you get pitches from the right vendors that don't waste your time, while also streamlining the RFP process for all parties involved.

In addition, it makes it easier to gather information, compare proposals, and shortlist top bidders.

5. Draw up the project timeline

Depending on how complex your project is, you may need to create a dedicated section for your project timeline, providing clear outlines regarding expected deliverables at specific milestones and the general progression of the project.

Even if your project schedule is not super tight, providing timeline expectations will help vendors assess their resources and workload to determine if they can complete this specific project in time.

6. Identify potential roadblocks

If you foresee potential blockers in your project, it is always a good idea to include this information in your RFP.

You see, a well-rounded RFP doesn't just show and tell potential vendors what you're trying to achieve. It also highlights potential risks and roadblocks. This way, contractors can get a headstart on brainstorming solutions to these issues, thereby improving chances for success.

Besides, being upfront about potential challenges can also be a great way to trim your eventual shortlist and pick the perfect partner based on the solutions they offer.

7. Provide RFP response guidance

Finally, you should also provide clear guidance to potential vendors on how they respond, what additional information to include, and what they can leave out.

Such RFP requirements could include:

• Contact information: This should include details on who to send responses to and how to reach them.

• Submission deadlines: You should also set a deadline for your submitting proposals and communicate this with your prospects.

• Required elements: Also, highlight the essential information that vendors must include in their proposals.

What are some RFP best practices?

Follow these best practices to create more effective RFPs:

Determine your project needs

Your RFP is essentially a document that outlines your project goals and how you want to achieve them — or in other words, what your project needs.

Therefore, the key to creating a comprehensive RFP is to identify what success means for you. This includes details such as:

• Project scope

• Project timeline

• Estimated budget

• Potential roadblocks

• KPIs or milestones

Identify the key stakeholders

Next, you'll need to identify and create a list of the key stakeholders on your project. Your stakeholders are essentially the team that will evaluate RFP responses and pick a vendor; for technology purchases, these teams consisted of 12–14 participants in a recent Gartner study.

Stakeholders typically feature a team of project owners, company executives, procurement officers, financial reviewers, and legal representatives.

Define your evaluation process

Once you've chosen your team of stakeholders and identified your project needs, the next step is defining the evaluation process for the RFP responses you get. To ensure objectivity, you must set a standard or a list of criteria by which you'll eliminate options and pick your final vendor.

During this stage, you should also set a deadline for response submission, a timeline to evaluate the responses, and a date on which you'll announce the winning proposal; with a structured approach, this entire vendor evaluation process can be completed in less than three months.

Choose the best RFP-creation software tools

Finally, you want to decide on a tool for creating your RFP. Remember, your RFP-creation software has a direct impact on how coherent and easy-to-understand your RFP will be. Therefore, it is always a good idea to prioritize trusted providers.

Guru can help here.

By combining the power of Guru's AI-driven knowledge-base creation and your project details, you can ensure that all vital information — from your company's background to technical capabilities — is present in your RFP.

In addition, our ChatGPT integration can help draft the initial content for your RFP, backed up by accurate and relevant information stored in your organization's internal wiki powered by Guru.

That said, let's examine how to evaluate responses to your RFP.

What should you look for in an RFP response?

There are several elements to look out for when evaluating vendor responses to your RFP:

• A cover letter: The cover letter attached to a proposal gives you insight into how relevant a vendor is and how much they understand your project.

• Compliance with requirements: Ensure the responders address all the requirements in your RFP as this highlights their attention to detail.

• Cost: You should also review the vendor's pricing structure to ensure it is transparent and aligns with your budget.

• Experience: A good proposal should include case studies and references that highlight a contractor's ability to deliver on your project.

• Technical approach: You should also look out for detailed plans, including strategies and processes, for achieving your project goals.

• Innovation and added value: Finally, you should prioritize responses that go beyond basic requirements to offer innovative solutions to potential roadblocks and perceived challenges.

By evaluating these aspects of the RFP responses you get, you improve the chances of choosing a vendor that aligns with your project's goals and guarantees a productive partnership.

Top 5 RFP examples to inspire you

RFPs have become a staple in today's business world, regardless of niche or industry. After all, they are one of the most effective ways to collaborate with top third-party vendors in their respective fields.

Here are some real-world examples:

1. Marketing RFP

In this RFP, Children's Defense Fund, a nonprofit organization, ditches the uptight and very formal tone that many companies use in favor of a more relatable and conversational flow. This effectively communicated to potential vendors the kind of organization that they were and showcased the brand strategy they wanted.

2. Technology RFP

The National Association of State Workforce Agencies published an RFP for information systems risk assessment. This example demonstrates clear scope definition and emphasizes confidentiality requirements for sensitive data projects.

3. Business operations RFP

This RFP issued by New Jersey City University (NJCU) was born out of a need to understand their overall impact based on their data. The RFP walks potential vendors through the university's desired objectives while highlighting a supplier diversity policy. It also poses several priority questions the university wants responders to answer.

4. Financial RFP

Requests for Proposals are also popular on the financial scene. Unsurprisingly, they typically contain a lot of detailed information. In this RFP that the Office of the State Treasurer of Delaware issued for an endowment manager, you'll find extensive qualifications and submission instructions. It also includes tables responders need to fill in, indicating the assets they have managed and client base numbers.

5. Healthcare RFP

CNY Care Collaborative wanted support services for their electronic medical records so they put out an RFP. It included detailed and comprehensive guidelines for responders, including extensive inquiries into the vendor's background and experience.

Transform your RFP process with AI-powered knowledge management

Creating a comprehensive and accurate RFP is critical, but the process is often manual and repetitive, which is why many purchasing departments are aiming to achieve a 70% rate of digitized processes by 2027 to overcome these challenges. This leads to inconsistencies and wasted time tracking down information. To build a truly effective RFP, you need a single, trusted source of truth.

Guru provides your AI Source of Truth, streamlining the entire RFP lifecycle. It starts when you connect all your company's scattered information—from product specs to security policies—into one unified company brain. Then, your team can interact with this brain through a Knowledge Agent to instantly draft accurate RFP sections, pulling verified information directly into your documents. When an expert needs to correct or update a piece of information, they do it once in Guru, and that trusted answer propagates everywhere. This ensures every RFP is built on a continuously improving, auditable layer of truth.

Ready to move beyond manual data entry and create better RFPs, faster? Watch a demo to see how Guru can become your trusted layer of truth.