People often ask what the difference is between the expression d ' interest, Request for Proposal and Contract Request approaches to the provision of goods or services. These methods are ways that a company (often a public / civil service or government body) requests offers or proposals for the supply of services or products. The differences between these three approaches are described in this article.
Expression of Interest (EOI)
calls for expression of interest (EOI) are used mainly when the applicant does not have a solid idea on the type of product or service requested. The company issued the EOI may have a high level of understanding of their business problem or requirements, or the type of product they need, but they are unsure of the market's ability or desire to meet their needs. The company issued the EOI may need to collect some additional information before they are able to make decisions on procurement.
Examples of information obtained from an EOI include identifying:
- available technologies, products or services available on the market to meet their business needs
- parties willing and interested or potential suppliers that offer products or services
- if any of these potential companies will accept the terms and conditions imposed by any contract or deliverable expectations
- maturity and experience of the companies that offer such products or services, and their ability to provide similar products or services
- indication of the likely costs associated with the delivery of the product or service
- a pink number of suppliers candidates, which can be used to move towards an RFT or RFP
is unlikely that a ' organization directly purchase from performing an EOI. Given the cost and effort involved in preparing a response to an EOI, asking companies often engage specialist consultants to perform market surveys to scope out the available products and services and their providers without actually doing a formal EOI. This method ensures that there are no costs incurred by potential providers. This also helps if the applicant does not want to highlight to the market that they are about to make a purchase or have not actually secured the funding for the project.
If an EOI is made, because of the cost, many potential respondents may have second thoughts about the presentation of a response. However, the last point (6) above is the key question was to be obtained from the responder potential to determine when to respond. If a company does not respond, there is a potential risk that they will not be able to enter the RFP or RFT stage of the procurement process. This decision to respond can only be made by that company in evaluating the advantages and disadvantages.
Request for Proposal (RFP)
for proposals (RFP) requests are used to purchase goods or services directly. The requesting company clearly understands their problem or need and is aware that there are potential options available in the market, but it is open to suggestions for solutions to their problem. This is often required for consultancy services, where the exact physical deliverables can not be defined, or in the field of information and communication technologies (ICT) projects where there are multiple solutions to a business problem.
The RFP gives the purchasing company with the greatest flexibility in purchasing, as although the requirements can be defined, the solution is not. The requirements of the RFP can range from being fairly specific or be broad, high-level business requirements. However, by its nature, an RFP will allow an offer to suggest the best way to solve the problem. RFP provides responding companies the best opportunity to demonstrate how they would solve business problems or needs of a company.
Once an RFP has been evaluated, the requesting company may end up in a number of situations such as:
- to decide on a solution or provider service preferred, and negotiate a contract with them
- preset some preferred candidates, and enter into negotiations with all of them, as a tactic to find the best option
- deciding to accept any part of a solution by one or more suppliers, if they are not convinced that any solution is acceptable
- deciding that there is no acceptable solution and changing their requirements, and is seeking further contributions from companies who responded to the RFP, or closing this particular RFP and start
Request for Tender (RFT)
requests race are often using in building and construction industry, where solutions to a problem are very specific, and have been designed and specified. An example is a call for tenders for the construction of a house or a bridge, where the designers have developed the plans with measurements, and all the materials have been clearly defined. I can not imaging many people requesting a tender for a "house of four bedrooms" and not to say the manufacturer potential of what they want to look like!
For a tenderer responding to a RFT, there are not many variables or options to offer different solutions. The offers are not normally used for this reason. You could limit flexibility and creativity, which is a problem if an applicant has not done much investigation solution available. On the other hand, if you know your specific needs, and do not want any deviation from these specifications, then you use a RFT.
In summary, the best option for most of the purposes and flexibility in procurement is a RFP. If the requirements for a project are very specific, and any deviations from your specifications are not acceptable, then use a RFT. However, if a company has limited information about the options available on the market, an EOI would be a good start.
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