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Organizations ranging from federal government agencies to nonprofits and private businesses look to secure contracts for products and services through requests for proposals. Businesses respond to the RFP with a bid to provide the products or services.
What Is an RFP?
A RFP serves as a guiding document to provide potential vendors with detailed information about the product or service required. It also provides specifications for how businesses must structure their proposals, the information they must include and any restrictions that apply. For example, a government RFP might bar some or all foreign companies from participating in the bid selection process because of security concerns.
State, local and federal government agencies must publicly list RFPs to ensure the bid process remains open, transparent and fair. Governments and agencies typically maintain a purchase or procurement section on their websites listing open RFPs. Private businesses and nonprofits are not obligated to publicly disclose RFPs and may only solicit certain vendors for proposals. A number of fee-based services, such as FindRFP and Onvia, provide RFP listings for government and government agencies. The RFP Database website provides free government, nonprofit and private sector RFP listings.
Although RFPs are supposed to ensure fairness, that's not always the case. According to a March 2013 article in Inc. Magazine, organizations soliciting bids often provide insider information to a preferred vendor, which maintains the illusion of fairness with none of the substance.