Request for proposal (RFP)

A request for proposal invites suppliers to explain how they would meet a business requirement and at what cost. It is useful when the buyer needs to compare approaches, service levels or technical solutions as well as prices.

An RFP typically sets out the business objective, scope, constraints and evaluation criteria while leaving suppliers some room to propose how the work should be delivered. Responses may address implementation, staffing, service levels and risk as well as price. The buyer can then assess value against the complete requirement instead of choosing solely on cost.

For example, a retailer seeking a fulfilment partner may ask providers to explain storage, returns handling and system integration for its expected volumes. An RFQ is more suitable for a fully specified purchase. An earlier request for information can help the retailer understand available services before writing the RFP.