RFP's, Proposals, and Contracts – Part 1
In part 1 of this 3 part series I will discuss the fundamental differences in the types of information requests we receive from potential clients and how to process that information so that you can both qualify and respond to those requests in the proper manner. First let’s discuss the three types of requests and the differences between them.
The first type is a Request for Information (RFI)
These types of requests are usually limited to the following purpose:
- An RFI is usually submitted when the client is looking for help with identifying a problem.
- Usually these types of requests are for agencies that are hired to assist in putting together a full requirements document.
- Sometimes used as a pre-qualifier for vendor selection of the bidding process.
- Usually help to set the budget if determined by hourly rates.
An RFI can be used for obtaining a consensus on the prevailing rates of developers and designers. This could also be used as a way to qualify a pre-determined pool of prospective companies that the client wants to approach later once they have put together a full requirements document. Think of this as a first impression. When you respond to an RFI you do not need to have any fancy type of documentation or need to “sell” your company at this point. All they want to know at this point is a company history, basic qualifications, services offered, and standard hourly rates.
The second type of request is a Request for Quote (RFQ)
An RFQ usually has the following characteristics:
- An RFQ is usually a short document and can be an internal part of an RFI or an RFP.
- These are usually requests for basic “ala carte” pricing for various services and rate structures.
- An RFQ is usually price focused and not so much about the details.
- Can be service oriented where the client wants to know more about the services and experience your company can offer.
An RFQ can be used when the client needs a more rough idea of what a project is going to cost so they can obtain project funding and set budgetary goals before investing time into a formal proposal process.
The third type of request is the Request for Proposal (RFP)
An RFP the type of request you are probably the most familiar with. The RFP can include the following:
- Can contain both RFI and RFQ in the same document.
- An RFP is where you will offer solutions to the client’s requirements (problems).
- RFPS’s are usually very detailed and contain many sections and pages.
- Used as a tool for competitor analysis.
- Takes the most time to create.
- Has set deadlines and requirements for questions, responses, proposal structures, and submissions.
So how do you qualify an RFP to know if it’s really worth your time to put together a proposal? Since RFP’s are usually the most detailed type of request they will include some key indicators that you should look out for and investigate. The following are some primary things you need to know when you receive an RFP:
- How was the RFP distributed? – Look at how the RFP was sent out. Was it posted on a public website for a larger audience, was it posted in a freelance or RFP collection database website? Chances are if you were not hand selected or targeted to be a potential vendor, then your chances are very small that you would ever win the project.
- How was it received? – Were you contacted directly from your own website contact form, or did you provoke a conversation or phone call with a potential client. In these cases your chances are increased as a selected vendor.
- Are you allowed to talk to someone on the phone? – I have found that this is a primary factor in qualifying an RFP when I am approached. I don’t need to physically meet my clients in most cases, but I at least want to know that I can pick up the phone and talk to a real human being. Doing this will greatly increase your chances of being selected as a vendor of choice. You can be the absolute most qualified person for the job but if you have not attempted to make a human connection then your chances have severely diminished. Always try to find a way to contact someone personally. If the RFP strictly states that you are not allowed to contact anyone by phone (believe it or not I have seen this many times), take a pass on that RFP. If you are not worth their time to talk to you, then they are not worth your time writing up a proposal that will potentially take many hours of your precious time.
- How are questions handled? – Is there a formal process, a deadline for question submissions, can you talk on the phone, email only? How are answers received? Are they collecting a large pool of questions from all vendors and then posting the answers in a formal document on their website for review? If the RFP does not clearly state this then you need to ask what the process is up front.
- Match your skills to the RFP requirements. – Can you handle every task required? Do you need help? Are you the perfect match? Do you know the client’s personality? These are all questions that you will need to ask yourself when determining if you are right for the job.
- Focus on the RFP’s that you have a 50% chance or better of getting the job. - If you were chosen as a result of a vendor selection process as I have previously discussed in the RFI and RFQ then your chances are extremely good but you should most definitely find out how big that vendor pool is so you know your chances are good. If the client has narrowed down a pool of 3-5 vendors then this is a good competitive pool to belong in.
- Have an exit partner for jobs that are over your head and that you do not have time for. - It is always better to tell a potential client that their project is out of your scope of abilities and refer them to other vendors that you know and trust. This is much better than leaving the client on their own to look for another vendor. They will respect you for your honesty and possibly consider you for future projects that are within your abilities. If nothing else, your partner will greatly appreciate your referrals and trust.
- You do NOT have to respond to every RFP! - Knowing this is the most important thing. Not every potential client is a good fit for you and you are not a good fit for every client. Knowing how to determine this takes a lot of practice and experience. If you find that you are not a good fit for the project either at the beginning or in the middle of the proposal process, then you need to let the other party know your reasons why you are declining the opportunity and be as professional as possible. Never just ignore a request. If they took the time to contact you, then you should at least give them the same courtesy of a response. You do not need to make it anything personal, just keep it all business and be kind in your correspondence.
Next month we will discuss Part 2 of this series and continue with the topic of the proposal writing process. I will discuss how to increase your chances of being the vendor of choice and how you can step up your game to move away from the “amateur” image to the “professional” image you’re reaching for.
See you next month!