RFQs and RFPs Explored

We examine the two and why one is rising in popularity in 2020/2021.

Introduction

The arena of public procurement is catching up from shutdowns in March, April, and May, and demanding shorter turnaround times. Simultaneously, purchasing teams are changing the very nature of projects with as-needed lists preferred over single awards to one vendor. Both have altered the landscape and shifted attention away from larger RFPs and onto RFQs.

Therefore, it's important to understand the difference between RFQs and RFPs, especially in 2020/2021.

RFQs

The Request for Qualifications/Quote

A purchaser releases an RFQ nowadays because they are in a bind. The financials of firms, even entrenched incumbents with deep pockets, are changing. Stability and contract capability are variables you don't miss with, so it is worrying to large US agencies whenever performance starts to slide, a line of credit isn't there, or promises are not kept.

The RFQ provides a lifeline because it opens up the dialogue (whereas the RFP is the dialogue) and welcomes suggestions for projects where one, two, or three firms could reasonably perform without an issue.

It's not like the old days when an RFQ meant that a purchaser was lost, not convinced, or fishing the competitive landscape. The background matter has changed; intentions, desires, and wants have all changed too. The RFQ as a contract vehicle is especially flexible, open, and makes no guarantees. Because of these reasons, and because it gives power back to the purchaser (as opposed to the project specifications or SOW in an RFP), it is rising in use nationally.

How to Respond to an RFQ

Business owners largely tend to treat RFQs and RFPs in the same manner. This is a mistake that spawns opportunity costs.

A more informed business owner, VP, or Director knows that an RFQ is simply a vehicle for introductions and displaying authority. It's requesting the paperwork upfront to streamline future task orders and purchases (of various sizes) later down the road.

An even more informed business owner, VP, or Director knows that these responses must be concise. This breaks the habit of many, and goes against the easy instinct to insert everything even remotely relevant. "Everything but the kitchen sink" is not the strategy of our seasoned pro. The more exact in proximity to the purchaser, the better. If you're close by, you don't need to send everything. They'll know that at any given time, you'll quickly be there to answer supplemental questions or provide alternatives, if needed.

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RFPs

The Request for Proposal

Surprisingly, as more people are entering the world of GovCon and participating at record pace, the RFP is shrinking or moving to online-only, open-submission formats. It's the sedan of the car world in an age of increasing customization, specialization, and different needs and family sizes.

There are some industries where the RFP isn't going away or changing all that much. We're more interested in those drastic cases where the authority and dominance of the RFP is waning. Obviously, this identified shift has implications for capture managers and the secondary RFP services marketplace, but it also affects mom and pops, startups, SMBs, sole proprietors, and the millions of partnerships forged between those groups.

On the bright side, public RFPs (those issued by a public entity) are predictable. This is contrary to private RFPs. Some are able to support themselves and their workers on this predicable nature. The same cannot be said of the RFQ.

How to Respond to an RFP

"Just use a modified template" were never the words of a winning, high-performing team. As with everything, it's a bit complicated, because a template can be enormously helpful in kickstarting the initial push or revisitation of bids/bidding. They can get people excited again and, in the short-term, decrease stress and open up bandwidth. Modifiable templates for RFPs will eventually breed bad practices, welcome bad habits, and appeal to numbers-game illusions (where you think the team is extremely productive and effective due to the wrong metrics).

You respond to RFPs by knowing your purchaser. Some say compliance, formatting, aesthetics, and "vibe." These are important, but they're mostly the same when you boil it down. Knowing your purchaser (and future customer) means taking all of those things into account and mixing in emotional/personal touches that evaluators living in those regions would relate to.

The above was written during the COVID health crisis and reflects the unique situations facing bidding teams and purchasers during this strange time. We think it's important to understand these changes due to their resonating effects across industries. We also think that the changes in procurement you see today will stick.

Contact us for more insights.