A proposal is a potential supplier’s response to a Request for Proposal (RFP) in procurement. It includes a company overview, specification response, and pricing. Tender proposals are legally binding, and deadlines are crucial. The response section should meet the requirements point by point, and prices should be clearly stated. Restrictions on acceptance and payment terms should also be included.
The term Proposal is used in the procurement field to describe potential suppliers’ response to a Request for Proposal (RFP). There are three aspects to any bid proposal: company overview, specification response, and pricing. Tender proposals are legally binding responses in a procurement process. There is a large amount of commercial law relating to contracts, requests for offers, purchase proposals and conditions of acceptance. Take the time to ensure your answer is accurate and present a solution that can be completed profitably.
The format of a tender proposal varies widely by industry, but they all have the same basic requirements. The most important part of any sensitive response is deadlines. All RFPs have an expiration date and time clearly specified in the document. Any responses received after this date cannot be accepted or included in the review process. Contract law is very clear on this issue and many firms have been taken to court for awarding contracts to firms that bid after the deadline. The judges invariably decide in favor of the plaintiff who submitted the tender proposal on time, and may award damages in addition to attorneys’ fees.
The first section of each RFP is an overview of the company responding to the RFP. Typically, the firm should include a background in the industry, highlighting successful projects of similar size or larger, to indicate the ability to meet the firm’s requirements. If the company is publicly traded, this should be included in the background section, along with links to press releases, the company’s website and a list of executives.
The response section will receive the most attention from the customer. Consequently, it should be focused on meeting the requirements point by point. Many companies use the RFP framework to format their response, correlating each section to make it easier for the customer to compare. Additional supporting documentation requested in the response should be listed as appendix documents and properly indexed. Many companies include the presentation of the response as a marked element in the evaluation matrix, making it worth the effort for the responding company.
Prices are usually a separate section of the tender proposal. If multiple pricing options are available, the response should clearly state the primary value, along with pricing for the different alternative solutions. Many purchase agreements include a recurring cost, such as licenses or annual maintenance. This value should be provided in this section, with a clear indication of the length of the mandate.
Any restrictions on acceptance of the tender proposal must be included in the response. This includes deadlines for accepting the offer, scheduling for work to start, resource flexibility and other issues. Payment terms are also usually indicated in the response so that the negotiation process can begin.
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