What Is an RFP Response? 5 Tips for Responding to RFPs
The United States federal government is the largest customer in the world. In 2018, the government issued more than $550 billion in contracts.
This figure does not include additional contracts awarded at the state and local level. There are even more buyers in the private industry.
Various agencies in the federal government award contracts for services and supplies. Many companies mistakenly believe that only major companies win these contracts. However, the government makes a concentrated effort to award to small, disadvantaged businesses.
The contracting process is kicked off by a Request for Proposal (RFP). You may be wondering, what is an RFP response? Read on to learn five tips for responding to an RFP.
1. Read the RFP Instructions Carefully
If your company’s RFP submission does not meet the requirements, it could be removed from consideration. It is not a winning formula to provide a commercial product catalog and price quote.
To avoid your bid being tossed, the solution is to carefully read the RFP. The end goal is to provide all the information and documentation that the customer is looking for.
2. Provide a Cost Volume
Every customer is deeply interested in cost. For the government, the Federal Acquisition Regulation (FAR) requires that the agency pay a fair and reasonable price. In private industry, customers want to pay the best price to bolster their bottom line.
The RFP will tell you exactly how detailed the cost proposal should be. Top-line pricing is acceptable in some cases. Other RFPs will ask for labor categories, rates, and a breakout of material costs.
3. Substantiate the Cost
The customer is not going to accept the proposed cost at face value. They are likely to request substantiating data that supports the proposed cost.
For supplies, this means your company will be required to provide invoices or prior contracts as cost support. For labor hours and rates, data from your company’s accounting system may be requested.
Employee pay stubs are another form of substantiating data. The bottom line is that you should be prepared to support your cost position.
4. Provide a Clear Approach
The RFP response should not be confusing. If the submission is confusing, it will lead to uncertainty and many questions during the bidding process.
Instead, you should provide a clear approach to meeting the RFP’s requirements. Plain language that is easy to understand is the preferred writing style.
5. Understand the Process
The RFP process is different for each customer. Take pains to learn the process before submitting a proposal.
This will ensure that you are well-positioned to meet requirements in a timely manner. Some customers impose tight deadlines. If you do not understand the process, these deadlines may be unachievable.
What Is an RFP Response? A Recap
The process for an RFP is your vehicle to winning a contract award. In order to win a competitive bid, your company must submit a quality proposal. Providing substantiating cost data and writing a clear proposal are two ways to help your cause.
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