If you are new to government bidding and are somewhat confused about the difference between the various types of procurement documentation, such as a Request for Proposal and a Request for Bid, you can gain a better understanding of these in this article.

RFP or RFB: What’s the difference? 

When companies and governments seek to purchase products or services, they will issue official documents inviting vendors to submit bids. Two of the most common types of such documents are a Request for Proposal (RFP) and a Request for Bid (RFB).

Although both documents are used as instruments in the procurement process, each serves a distinct purpose and follows a separate process.

RFPs and RFBs are not the only types of documents used in public procurement.

  • Request for Information (RFI) requests information regarding a product or service from suppliers.
  • Request for Quote/Quotation (RFQ) invites particular contractors and suppliers to quote for a project or task in order to find the one offering the best possible price and quality.
  • Request for Tender (RFT) is an official request for proposals for the provision of goods, services, or works from eligible suppliers, service providers, and contractors.
  • RFX is an acronym that stands for “Request for ____ ” and can refer to any of the official request documents (RFI, RFP, RFQ, RFT, RFB, etc.), which basically means that RFX could stand for any of these.

Now let’s break down the RFP and RFB:

Request for Proposal (RFP):

A request for proposal (RFP) is an official document that contains a detailed description of a project, outlines the specifications, and invites vendor bids.

The RFP is used when the issuer or buyer has a specific goal and must consider a multitude of variables and factors in order to achieve this.

The document specifies the project's objectives, the expected results, and the evaluation criteria, allowing vendors to propose different approaches.

RFPs are typically used for a high-stake project or when an organization needs to source complex or strategic procurement categories such as fuel or logistics services. They are not generally used for straightforward or one-off purchases.

RFP is useful when:

  • The project is complex or open-ended
  • The buyer is investing a substantial sum of money
  • The buyer is in search of creative solutions
  • Services or technical experience are required

Real-world scenario

One scenario when issuing an RFP would be the preferred approach when city officials plan to create a smart traffic management system that requires a detailed architecture, software, sensors, and long-term support.

However, the city officials lack detailed information about the best technology for this project and therefore issue an RFP in order to compare the visions, expertise, and various technological solutions of different vendors.

What does the entire RFP process involve? 

In this section, we examine the RFP process from the perspective of the buyer (the organization issuing the RFP) rather than the bidder or vendor responding to it.

Here are the key steps a buyer typically follows to plan, publish, and manage an RFP effectively:

1. The first step involves clarifying project goals, identifying key stakeholders, and establishing a realistic timeline to keep the process on track from the start.

2. The contracting party must list all the business, technical, and operational requirements and include any compliance standards that vendors must meet.

3. This is followed by the preparation of the RFP document with a clear structure that includes:

  • Executive summary
  • Scope of work
  • Detailed requirements
  • Timeline, budget, and evaluation criteria

4. Issue the RFP to qualified vendors via email, procurement platforms, or website.

5. Evaluate the proposals using specific scoring criteria, defined in advance.

6. Choose the best candidates based on proposal quality and reputation, and by verifying compliance and security standards.

7. Choose the vendor that provides the best overall value and offer feedback to all the other vendors on the outcome.

Finally, it is important to evaluate the whole process to refine future RFPs.

Request for Bid (RFB):

An RFB is used when the buyer knows precisely the product or service it requires but is seeking the lowest possible price. An RFB includes concrete specifications, and bids are primarily evaluated based on cost.

RFB is used when:

  • Requirements are clearly defined
  • The product or service is standardized (e.g., office supplies, construction materials)
  • Cost is the primary decision factor.

Real-world scenario

A university requires 1,000 chairs; it has all the details regarding the type, size, and color and simply needs to find the best deal. An RFB would therefore allow vendors to submit bids, and the one with the lowest price for 1,000 chairs has the highest winning chances.

Things buyers take into account when evaluating RFBs

1. Specifications

Bids must respond precisely to the stated technical specifications, including delivery terms, quantity, quality standards, and any other mandatory requirements. Suppliers are expected to offer competitive pricing based on these clear parameters.

2. Price

The primary goal of an RFB is to identify the most cost-effective offer that fully meets all the defined requirements.

3. Objective evaluation

The contract is awarded to the lowest-priced bid that is responsive (meets all the requirements) and responsible (demonstrates the ability to fulfill the contract).

What does the RFB process look like for the buyer and the contractor?

1. Issuance of RFB

The contracting authority formally publishes the RFB, including all the technical specifications, terms, and conditions that bidders must follow.

2. Bid preparation

Interested bidders prepare their proposals, ensuring full compliance with the RFB’s specifications.

3. Submission of bids

Bidders submit their proposals before the stated deadline.

3. Bid opening and compliance check

Bids are opened in accordance with the applicable procurement guidelines (this may be done publicly or privately). Each bid is reviewed to ensure it meets all the mandatory requirements.

4. Evaluation

The contracting agency evaluates all the compliant bids, typically selecting the one that offers the lowest price while meeting all the technical and administrative requirements.

5. Contract award

The contract is awarded to the bidder who is both responsive and responsible and who offers the most cost-effective proposal.

6. Contract signing and project start

Once the agreement is signed, the project or service delivery begins according to the contract terms.

Final word

Navigating public sector procurement requires a thorough understanding of the differences between an RFP and an RFB.

While an RFB focuses on standardized products and services where pricing is the main consideration, RFPs are more suitable for complex, specific solutions that need careful consideration.

The two types of procurement documentation aim to ensure transparency, fairness, and value for taxpayers, and by selecting the appropriate solicitation type, companies and government agencies can align procurement strategies with their specific needs.