responding to RFPs in purchasing

Purchasing – RFP

When a person goes to buy a car, he or she usually doesn't visit only one dealer and expect to find a great deal on the car they want. They go to several lots and get different prices from all of them, then they choose the one which offers them the best deal and the most extras. Businesses do exactly the same thing when they are trying to fill the needs of their projects. Only they don't go from vendor to vendor, they simply send out RFPs.

RFP is an acronym which stands for Request for Proposal. Businesses use these requests in order to get information from suppliers that they can use to make final decisions on who to trust with their order for goods or services. Vendors, therefore, must be sure to include a comprehensive proposal that will stand out among the competition if they hope to win the contract.

Effective responses to RFPs usually share some common elements and understanding those elements can give a supplier an advantage in the final competition. For example, many vendors do not communicate appropriately with their audience in their proposals. Even if the request is for something technical, vendors must write the proposal so that it will be easy for those in procurement to understand. They should avoid using technical jargon except when necessary. Also, vendors should avoid using pre-written responses in their proposals. Many suppliers have large sections of their responses already prepared so that they just need to fill in the details, but an effective proposal is written specifically for the targeted buyer.

Besides the overall tone and language of the response, vendors need to include four important sections in their proposals if they hope to make an impression on the buyer. First, they need to describe how their product or service will be the solution to the buyer's problem. Even though the need to purchase raw materials or equipment may not seem like a problem, it can turn into one if the business does not secure a reliable source for those goods. The vendor must explain how they can ensure that such an event will not arise.

The second section that needs to be included is a list of benefits that the vendor can provide. Even though many vendors include a similar list, they make the mistake of listing features instead of benefits. Features would include “fine workmanship” or “high quality steel.” These points may be important to make, but they are not benefits. To provide benefits in a proposal, the vendor must ask himself “Why should the buyer care about fine workmanship? Why does it matter if this steel is high quality?” The answers to those questions can be transformed into a solid list of benefits that is focused on the needs of each individual buyer.

Another key element of an effective proposal is the vendor's credentials. No matter how wonderful the benefits sound or how eloquently written the proposal is, no business is going to choose a supplier unless that supplier has some experience in the field. At this point in the proposal, the vendor needs to detail some of its other projects, particularly if they are similar to the one they are competing for. Additionally, vendors should incorporate any awards, recommendations, or other praise into this section. All of those items boost the vendor's credibility with the buyer.

Finally, vendors need to provide examples, if possible. A company that manufacturers revolving doors, for example, may not be able to send a working example to the buyer but could send pictures of their doors installed in buildings. For raw material proposals, vendors could send along a small piece of metal tubing or a section of wire to illustrate the goods they offer.

Of course, even when all of these elements are combined together in a proposal, the vendor may still lose if his price is too high or his qualifications don't exactly meet what the buyer is looking for. However, a well-written and nicely prepared proposal improves the odds of that not happening.

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