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How to Create An Effective RFP

Gelman, Rosenberg & Freedman CPAs is a member of CPAmerica International, an association of CPA and consulting firms that provides industry knowledge including insightful articles, to help member firms serve clients and other individuals and organizations.

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There may be  times when your organization needs the expertise of an outside vendor or consultant.  Finding the right one isn’t always easy.

An RFP – a request for proposal – can  help.

Writing an RFP is easier than it sounds – and a lot easier than cleaning up later because the  vendor you hired was a bad fit.

When writing an  RFP, just remember “garbage out, garbage back.” The vendors who will be  responding need to have a clear understanding of your organization and its needs.

A well-written RFP will clarify your  objectives and the scope of the services you are seeking. It will also provide  a structured format in which the vendor should present its capabilities, costs  and expectations. RFP templates are available on the Internet that might help  you.

Writing the RFP

The first step  in creating an RFP is defining the project and your specific needs. What  exactly do you want a vendor to do? How? When? Where?

RFPs typically  have the following sections, though these can change somewhat depending on the  nature of your project:

Introduction. Explain to potential bidders in broad  terms why you are putting out an RFP and what you hope to accomplish by hiring  one of them. You may also summarize key points from other sections, such as  when their responses are due and when the project would start.

Background information. This section  includes information about your organization and the history of the current project,  leading up to the need for the RFP.

Requirements. This is a detailed explanation of what  you want the vendor to do, and a list of the information you expect to receive  from the candidates.

It is the most  important section and usually requires the most time – both for you to write  and for the vendor’s response. It can be written either as imperative sentences  (“List all of your locations.”) or interrogatory (“Where are your branches  located?”).

Structure of the response. Present the  structure of how you would like to receive the response. If the project is  complex or highly technical, you can break out the requirements into bullet  points to which the vendors are expected to respond.

A typical format  for the response might include:

  • Executive summary (high-level overview  with key points)
  • Vendor company background information
  • Proposed services or deliverables (how  the vendor will meet the RFP requirements)
  • Pricing
  • References (previous customers)

Selection criteria. Tell vendors how the winning  bidder will be selected. This gives you a chance to highlight your priorities,  your must-haves and nice-to-haves, to guide vendors’ responses.

Timelines. Specify the deadline to receive their  responses, the date you will announce the winning bidder, and the date the  project will begin.

Keep in mind  that the longer your RFP is, and the more detailed response required of  bidders, the more time you need to allow them to prepare a thorough response.

Evaluating  Vendors

The evaluation  process actually starts before you receive any RFP responses – that is, when you  decide who the recipients of the RFP should be. Do a little homework to get some  good prospects.

You may already  know who the vendors of interest are. If not, try the relevant professional  organizations, ask trusted colleagues and other vendors who aren’t in  competition, or even do an online search.

Get enough  information to rule out vendors that are clearly not a good fit. But limit  recipients so you don’t end up with reams of replies that create a mass of  disappointed parties who never stood a chance. On the other hand, it’s good to  have diversity. Send it to some large national vendors and to some small  regional ones, for example.

Don’t choose a  vendor based on price alone. After you read the RFP responses, narrow the list  down to the best ones and interview those.

Face-to-face  interviews provide the most information. What is the chemistry between you? How  well do they seem to listen to your concerns? Check references. Ask pointed  questions. They may be reluctant to say anything negative, but what they don’t say can be just as useful.

Finally, once  you choose a vendor, write a good contract that spells out all the particulars  and protects both your interests and those of your vendor. Your RFP and the  vendor’s response to it form the framework of your contract. If the RFP is well  written, the contract negotiation process should go more smoothly.


We love working with Andreas at Water For People!  He is a consummate professional yet encourages, even expects, a high standard of quality work but does so without being intimidating or demanding. 

Crystal Huish, CPA, CGMA |  Controller
Water for People