4.6.1.1: Bid Documents (RFI, RFP, etc.)

Managing Technology Projects · LibreTexts

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    In most large companies, there is a “Purchasing” department that has company-wide responsibility for managing procurements. It is often in organizations with sames such as Manufacturing, Supply Chain, or Operations.

    Usually, only someone in the Purchasing department can formally issue a “Purchase Order” (PO) listing the quantities of the ordered items and terms and conditions (Ts&Cs). You request a Purchase Order via the “Purchase Requisition” process, to be discussed in a subsequent section of the textbook.

    This Purchasing group also manages Approved Vendor Lists (AVLs).

    Bid Documents

    As part of the project work, an assessment is made for certain pieces of work to be done with resources internal to the organization, or in other cases, the work may be done by an outside supplier.

    If some work is going to be contracted out, the following documents are typically used.

    Contracting Document Types

    Document

    Meaning

    Description

    RFI

    Request for Information

    Request for information from potential suppliers about their capabilities to meet your needs

    RFP

    Request for Proposal

    Request for suppliers/vendors to provide a solution

    RFQ

    Request for Quote

    Request for a price quotation from suppliers/vendors, typically when the requested item is generally available in the market and price is the major factor

    Bid Process Flow

    The process of handling the bid process is as follows:

    Bid Process flow described in text.

    Figure \(\PageIndex{1}\): Bid Process Flow. (Robert Slate, CIS course materials)

    The process steps in Figure \(\PageIndex{1}\) are further described here.

    • RFI (Request for Information): the organization puts out a Request for Information from potential suppliers about their capabilities to meet your organization's needs, usually using a Statement of Work that you provide.
    • RFP/RFQ: the organization requests responses from qualified suppliers.
    • Bidder conference: In the interest of fairness, the following is usually done:
      • There is a conference held with all of the potential suppliers present.
      • If any clarifications are in order, your organization responds with the clarification send to all parties so that everyone has a common understanding.
      • The goal is to have no preferential treatment of any suppliers.
    • Supplier responses: the suppliers submit their responses based on the RFP or RFQ and answers that they received through the bidder conference.
    • Vendor selection. There are several ways to do this. One is by ranking vendors based on weighted criteria and scored assigned to each criterion. The supplier with the highest score wins.
    • Contract. The contract is awarded to the supplier. The contract is signed by both parties with legally binding terms and conditions (Ts & Cs). Depending on the supplier, your organization may have a Master Services Agreement in place with the supplier.

    Contracts

    Usually only corporate executives and Purchasing organization personnel are authorized to sign contracts on behalf of an organization.

    Contracts go through approval with the legal department.

    The legal department usually has responsibility for maintaining the official repository of contracts, including any agreed-to changes to contracts.

    4.6.1.1: Bid Documents (RFI, RFP, etc.) is shared under a CC BY 4.0 license and was authored, remixed, and/or curated by LibreTexts.