What is RFP (Request for Proposal)?

A Request for Proposal (RFP) is a document that an organisation uses to solicit detailed proposals from potential vendors for a specific project or service. It outlines the project's requirements, scope, and objectives, and invites qualified suppliers to submit their solutions and pricing. RFPs are commonly used for complex projects where multiple vendors need to be evaluated based on various criteria.
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What is RFP (Request for Proposal)?
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2 min read
15 July 2025

To achieve optimal results and maximize return on investment, it’s essential to organise purchases effectively. A Request for Proposal (RFP) is a crucial first step for making high-value purchases, whether you’re in the government sector or a private organisation.

But what exactly is an RFP, and how can you create a compelling proposal for qualified vendors? Discover all the key details here.

Definition of RFP

A Request for Proposal (RFP) is a formal document issued by an organisation—whether a business, government body, or nonprofit—when it plans a new project and needs outside vendors or contractors to carry it out. The RFP invites these professionals to submit detailed bids outlining how they would complete the project.

What is Request for Proposal (RFP)?

A Request for Proposal (RFP) is a structured way for organisations to find the right partners for upcoming projects. The RFP document outlines the scope of work, timeline, expectations, and requirements, and invites bids from vendors or contractors with the relevant expertise. These bids help the organisation compare offers and choose the most suitable one.

RFPs are often used by government departments and large companies for projects that require specific skills, technology, or external support. By reviewing multiple proposals, the organisation can assess the value, experience, and cost each bidder offers before selecting a partner. This process helps ensure transparency, fairness, and better results when outsourcing complex work.

Key takeaways of Request for Proposal (RFP)

  • An RFP defines a new project and communicates what the organisation wants to achieve.
  • It clearly describes project objectives, expectations, and the bidding process in one document.
  • It includes details about deadlines, submission formats, and evaluation criteria.
  • RFPs often outline the budget range, which could be fixed or flexible, such as up to Rs. 10 lakh.
  • The document helps companies compare bids based on price, experience, and approach.
  • Most government projects and many corporate projects use RFPs to find the right vendors.
  • It encourages healthy competition by inviting multiple vendors to submit proposals.
  • Unlike informal discussions, an RFP creates a structured and fair process for choosing the best solution.

Understanding Request for Proposal (RFP)

A Request for Proposal (RFP) is most commonly used when a project is too large or too complex to be handled internally. Organisations preparing an RFP must define what they want from the contractor, outline the scope of work, and describe the expected outcomes. The document also sets out how the selection process will be carried out.

The RFP usually includes a Statement of Work (SOW), which explains the exact services or deliverables expected, along with deadlines, project milestones, and completion timelines. In addition, it often outlines how the bidder must format their proposal and what information must be included—such as previous experience, project methodology, and cost breakdowns in Rs.

The purpose of an RFP is not to restrict creativity, but to give all vendors the same baseline understanding of the project. It needs to be detailed enough to offer clarity but still allow room for innovative solutions.

Most RFPs come from public sector entities such as government agencies or non-profits. These institutions must ensure transparency and get the most cost-effective solution, which is why they rely on RFPs. However, private companies also issue RFPs when they require multiple perspectives or lack the in-house capacity to carry out a specialised project.

Example of an RFP

Consider this scenario: the Ministry of Transport issues an RFP to build a new high-speed rail network. The document includes the technical requirements, expected timeline, and evaluation process. Engineering firms and infrastructure developers then submit detailed proposals outlining how they would complete the task, what resources they’d use, and their expected budget—say, Rs. 1,000 crore.

After reviewing all proposals, the ministry sets up a panel to assess the most viable options. The chosen firm is then awarded the contract to start the work. This method ensures a fair, competitive, and transparent selection process.

What is the purpose of an RFP?

The primary purpose of an RFP in real estate is to facilitate a fair, competitive, and transparent selection process for services or solutions. It allows property stakeholders to gather detailed information from potential vendors, ensuring that the selected partner aligns with project requirements and objectives.

Who uses Requests for Proposals?

Various stakeholders in the real estate ecosystem utilise Requests for Proposals. This includes property developers, project managers, facility managers, and commercial property owners seeking specific services or solutions. Essentially, anyone looking to engage external expertise for a real estate project can use the RFP process.

Requirements for RHP (Request for Proposal)

Government agencies or other organisations may need to issue requests for proposals (RFPs) to foster full and open competition while reducing solution costs. However, choosing the proposal that best meets the specifications does not always equate to selecting the lowest-priced bid.

Crafting an effective RFP is crucial to the success of the resulting solution. If the requirements are too vague, bidders may fail to design and implement an appropriate solution to address the issue. Conversely, overly detailed and restrictive requirements can stifle bidders' creativity and innovation.

The RFP process begins with drafting the initial request for proposal. Bidders review the document and provide suggestions for improvement. After incorporating feedback, the final RFP is issued, and bidders submit their proposals.

The customer then shortlists a small group of bidders and enters negotiations on pricing and technical details. Before awarding the contract, the customer may request a "best and final offer" from the remaining bidders. Ultimately, the contract is awarded to the company offering the most effective solution.

Benefits of Request for Proposal (RFP)

An RFP serves as a form of advertisement, signalling the launch of a project and inviting qualified candidates to participate in its execution.

In the government sector, RFPs are used to eliminate favouritism in awarding contracts. This approach also promotes competition, which helps control project costs.

Without an RFP, a more informal process is typically followed, where the project manager independently researches and identifies potential vendors. However, this approach may limit the range of responses, as it depends on the thoroughness of the search. As a result, new vendors and innovative solutions may be overlooked.

RFP vs. RFQ vs. RFI

When procuring goods or services, businesses and government agencies often use various methods to communicate their needs to potential vendors. Three common procurement tools are the Request for Proposal (RFP), Request for Quotation (RFQ), and Request for Information (RFI). These documents serve different purposes in the procurement process, helping organizations choose the right vendors and solutions.

Aspects

RFP
(Request for Proposal)

RFQ
(Request for Quotation)

RFI
(Request for Information)

Purpose

To obtain detailed proposals and solutions from vendors.

To obtain price quotes for a specific, well-defined product or service.

To gather information on potential vendors and solutions.

Detail
level

High – includes detailed project requirements, technical solutions, and vendor capabilities.

Low – focuses primarily on pricing for clearly defined products or services.

Low – focused on gathering general information or options.

Use
case

Complex projects with unique requirements.

Standardised products or services where price comparison is the focus.

Early stage, exploratory phase to assess options.

Vendor
input

Vendors propose solutions, including technical approach and costs.

Vendors provide price quotes based on specified criteria.

Vendors provide general information about their capabilities or offerings.

Time
investment

High – requires significant effort from both the issuer and vendors.

Low – quick process focused on price.

Low – primarily informational and less time-consuming.

Outcome

Selection of a vendor based on the best overall proposal.

Selection of a vendor based on the best price.

A shortlist of potential vendors for further evaluation.

What is the difference between an RFP and an RFQ?

The main difference between an RFP (Request for Proposal) and an RFQ (Request for Quotation) lies in their purpose and level of detail. An RFP is used for complex projects where a company seeks detailed proposals from vendors, including their solutions, technical approaches, and pricing. Vendors are expected to provide tailored responses addressing specific project requirements.

On the other hand, an RFQ is used for straightforward, well-defined products or services where the primary objective is to gather price quotes based on clear specifications. The RFQ process is simpler, focusing mainly on price comparison rather than exploring different solutions. RFPs are used for more customised, innovative approaches, while RFQs are typically for standard purchases.

What is the RFP process?

The Request for Proposal (RFP) process is a structured and systematic approach used by organisations to solicit detailed proposals from potential vendors or service providers. The process typically involves several key steps, ensuring transparency, fair competition, and informed decision-making. Here is an overview of the RFP process:

1. Identification of need

The process begins with the identification of a specific need or project requiring external expertise or services. This could include anything from construction projects to professional services or technology solutions.

2. Development of RFP document

The organisation or buyer develops the RFP document, outlining project details, objectives, scope of work, and specific requirements. The RFP document serves as a formal invitation to potential vendors to submit proposals.

3. Issuance of RFP

The RFP is officially issued to a list of potential vendors or service providers. This can be done through various channels, such as email distribution, posting on procurement portals, or direct invitations.

4. Pre-proposal conference (optional)

In some cases, a pre-proposal conference or meeting may be held to provide potential vendors with an opportunity to seek clarifications and ask questions about the project requirements outlined in the RFP.

5. Proposal submission

Vendors prepare and submit their proposals based on the guidelines provided in the RFP document. Proposals typically include detailed information about the vendor's qualifications, approach to the project, timelines, and cost estimates.

6. Proposal evaluation

An evaluation team or committee, often comprising representatives from relevant departments, reviews, and evaluates the submitted proposals. Evaluation criteria are predefined in the RFP and may include factors such as experience, qualifications, technical approach, and cost.

7. Vendor selection

Based on the evaluation, the organisation selects one or more vendors that best meet the criteria outlined in the RFP. The selection may involve negotiations with the selected vendor(s) to finalise terms and conditions.

8. Contract negotiation

Once a vendor is selected, the organisation enters into negotiations with the chosen vendor to finalise the terms of the contract. This includes discussing project timelines, deliverables, payment terms, and any other relevant details.

9. Contract award

After successful negotiations, the organisation awards the contract to the selected vendor. This marks the official commencement of the project or service engagement.

10. Post-award communication

The organisation communicates the results of the RFP process to all participating vendors. This may include debriefing sessions for vendors who were not selected, providing feedback on their proposals.

11. Project implementation

The selected vendor(s) proceed with the implementation of the project or delivery of the services according to the terms outlined in the finalised contract.

By following this systematic RFP process, organisations can effectively identify qualified vendors, assess proposals, and ultimately make informed decisions that align with their project objectives and requirements.

When would you use an RFP?

Businesses often have limited staff and budgets to focus on daily operations. When they take on a new project—such as launching a new website, building an office, or installing new equipment—they may not have the skills or time to do it themselves.

In such situations, they issue an RFP. This allows them to invite bids from companies that specialise in those services. By comparing the proposals, the business can choose the one that offers the best balance of quality, timeline, and cost—say, within Rs. 10 lakh.

What happens after the RFP?

Once an RFP is shared with potential vendors, the organisation waits for proposals to come in. After the submission deadline, the review process begins. For large or sensitive projects, this might involve multiple rounds of screening, interviews, or even committee-level approvals.

This review ensures that only the most qualified and competitive bids are shortlisted. Finalists may be asked to clarify or expand on their proposals before a final selection is made. Once the winning bidder is chosen, a contract is signed and the project gets a start date.

This process ensures accountability and helps the organisation get the best results—on time, and within the estimated budget, such as Rs. 25 lakh or less.

In conclusion, understanding the role and intricacies of RFP in real estate is vital for successful project outcomes. Whether you are a property developer, project manager, or service provider, navigating the RFP process effectively can lead to informed decision-making and foster successful collaborations in the ever-evolving landscape of real estate transactions.

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Frequently asked questions

What are the 7 steps in an RFP?

The seven steps in an RFP (request for proposal) are:

  1. Initiation: Define the project's needs and objectives.
  2. Planning: Determine the evaluation criteria and team roles.
  3. Drafting: Create the RFP document with project details.
  4. Review: Ensure the RFP is clear, accurate, and aligned with goals.
  5. Issuance: Distribute the RFP to potential vendors.
  6. Evaluation: Assess the received proposals against the criteria.
  7. Selection: Choose the best-suited vendor and notify all parties.
What is difference between RFQ and RFP?

A request for quote (RFQ) is a document that asks for pricing information for a specific product or service, while a request for proposal (RFP) is a document that asks for detailed information about a product or service.

Is an RFP the same as a proposal?

No, an RFP is a document that requests proposals, while a proposal is a response to an RFP.

Who releases RFP?

The issuing company releases a Request for Proposal (RFP). This company is the one that needs a product or service and is looking for a supplier to provide it.

What is an RFP in real estate?

RFP stands for Request for Proposal. In real estate, it is a document that invites proposals from potential vendors or service providers for a specific project, such as property development or management.

Why is an RFP important in real estate?

An RFP streamlines the vendor selection process, ensures transparency, and helps in comparing proposals. It allows real estate stakeholders to make informed decisions based on competitive bids.

Who typically issues RFPs in real estate?

Real estate developers, property owners, or management companies usually issue RFPs. These entities use RFPs to engage with contractors, architects, property managers, and other service providers.

What key elements should an RFP in real estate include?

An effective RFP should include project details, scope of work, timeline, evaluation criteria, and submission guidelines. Clarity on expectations helps potential vendors submit relevant and competitive proposals.

What does RFP mean?

A Request for Proposal (RFP) is a formal invitation issued by an organisation asking vendors or service providers to submit plans and pricing for a specific project. It helps open up the process to fair competition and allows the organisation to evaluate different ideas, methods, and costs before choosing the best one.

What is RFP vs RFQ?

While an RFP requests detailed proposals to solve a problem or complete a project, an RFQ (Request for Quotation) is mainly about pricing. If a business already knows exactly what it needs, it uses an RFQ to ask vendors how much it would cost. An RFP is more flexible and seeks creative or customised solutions.

What is RFP and RFI?

An RFI (Request for Information) is an early-stage inquiry used to learn more about vendors and market options. An RFP (Request for Proposal) is a later step where the organisation invites detailed bids for a specific project. The RFI helps shortlist vendors, while the RFP helps select the final one.

Who needs an RFP?

Organisations that need to outsource a specialised task—like software development, construction, or marketing—often issue RFPs. These are ideal when the task is complex, requires expert input, or needs a competitive review process. By issuing an RFP, the organisation can find vendors with the right skills and compare multiple bids before choosing.

Who creates an RFP?

The company or organisation initiating the project creates the RFP. It is written by internal teams—such as procurement, operations, or finance—who understand the project requirements. The RFP communicates what work needs to be done, the timeline, and the expected budget range (like Rs. 5 lakh to Rs. 15 lakh).

Is an RFP a type of tender?

Yes, an RFP is one form of tendering. It’s a public call for proposals and is commonly used in government and corporate procurement. In many cases, the terms RFP, tender, and procurement document are used interchangeably. It’s essentially a “help wanted” notice for professional services or large projects.

How to write an RFP?

To write an RFP, begin by introducing your organisation and explaining the project goals. Include background details, expected outcomes, the deadline for submissions, and the budget—e.g., within Rs. 10 lakh. Outline the project scope, highlight potential challenges, and specify how proposals will be evaluated. Make the instructions clear to ensure better responses.

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