Request for Proposal is a document used by companies when they call for the bids from various prospect bidders for a specific product and service being offered. It may even contain content related to the activity for which the bid is being called. It also includes information regarding the process of how the bid will take place, the terms and condition.
It creates a competitive situation for the prospect bidders. It is submitted in the initial stage of the process. By doing so companies bring structure to the overall process. It reflects the long/short term strategy of the company along with which supplier will be able to match with the strategy.
A Request for Proposal hence informs the suppliers what the organizations actually looking for such that the suppliers can make their best attempt with reference to the competitive environment. By doing so companies allow a wide range of response and distribution. The quality of a RFP is very important as it guides the complete procedure of what is required.