What is an RFP in Construction?
An RFP in construction stands for a request for proposal. This request states there is funding available through a company for a particular project and that it is time for construction companies to place bids for the potential of completing the work. The RFP is an outline of the entire bidding process, as well as the terms of the contract, and it provides quite a bit of guidance on how the company wants the bids formatted and presented.
Here is a more specific breakdown of RFPs in construction and what is included:
- The background of the company that is issuing the RFP and what type of business they do.
- A description of the solution the company needs and how the proposals will be evaluated and graded.
- They may include descriptions of tasks that must be performed by the winning bidder, as well as a timeline for when the work must be completed.
- Guidelines as to how the proposal should be constructed and organized will also be included in most cases. Bidders will need to follow these instructions, or their proposal may be discarded. Companies include these guidelines, because when proposals are written in the same format, it makes it easier to compare numerous bids at the same time.
All requests for proposals benefit the initiating company, because they will receive different perspectives from numerous bidders. This will allow them to see their options as they choose who will be able to give them a solution for the work that they need completed.
Anyone that is interested in RFPs will find these following 12 steps of the process quite intriguing.
- It is always necessary for a company to do their homework before they begin the work on their RFP. After all, there is no point in creating an RFP for something that a company is never going to achieve in the first place. Instead, the company will need to work on one that will focus on what they are currently doing and what they can achieve.
- Companies also need to distinguish between their wants and needs when they are creating their RFPs, because while wants are nice, they are not always possible at the end of the process. No one wants to need to create a new RFP simply because they can’t have all the wants that they included in the first one.
- Prior to sending out the RFP, companies will need to determine what the winning bidder will look like. Some bidders will always come in with the lowest bid no matter what, while others will always focus on the best quality of work each time. Companies will need to know if they want lowest cost, best quality, fastest delivery, or a combination of everything when they are choosing the winning bid.
- It is necessary to organize the RFP properly, so that all bidders know what the project is about. Most RFPs have sections dedicated to introductions, requirements, selection criteria, the timeline, and each individual process.
- Writing the introduction is normally the easiest part of the RFP, because it is the reason why the RFP is being written and what the company hopes to accomplish.
- The requirements section normally takes the longest amount of time, because specifics are needed. Many companies will create subsections for this part of the RFP.
- In the selection criteria section of the RFP, companies will state how the winning bids will be selected. Some companies are very specific in this section, while others will be quite vague on purpose.
- The timeline section is very straightforward, as it lists when all the bids need to be submitted.
- The process for RFPs and projects is different for every company, which is why it is a necessary part of any RFP.
- Most RFPs are mailed out to bidders, but they can also be emailed or posted on company’s websites.
- Companies seem to have their favorite bidders to work with, which is why they may choose to mail their RFPs to them and no one else.
- As soon as a company has considered all the RFPs and chosen who won the bid, it will be time to notify that bidder. Then it is time to get the project started.
It is necessary for companies to create requests for proposals that have enough information without being too restrictive at the same time. The reason for this is that if the requirements are quite vague, the bidders will not have enough information to design or implement an exact solution for the project. They will also not be able to successfully create a firm bid that will cover the costs of the project. On the other hand, an RFP that is too restrictive will not allow bidders to be creative in their thought process and that can limit what types of solutions are given with the bid.
Oftentimes, a company begins with a draft RFP, which is then reviewed by bidders. Those bidders then submit suggestions to the company, which the company can then use to make the final request for proposal better. During this process, certain bidders may even be invited to a pre-bid conference, so that they can ask questions and learn more about the desired project. When this is all completed, the RFP is finalized and then issued.
RFPs may seem like a lot of work for both companies and bidders, but they do make the entire process of bidding and completing jobs much easier because everyone is on the same page.