What Is a Request for Proposal (RFP)?

A request for proposal (RFP) is a business document that announces and provides details about a project, as well as solicits bids from contractors who will help complete the project. Most organizations prefer using RFPs, and, in many cases, governments only use requests for proposal. A request for proposal for a specific program may require the company to review the bids to examine their feasibility, the health of the bidding company, and the bidder‘s ability to do what is proposed.

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KEY TAKEAWAYS

  • A request for proposal is a project funding announcement posted by an organization for which companies place bids.
  • The RFP outlines the bidding process and contract terms and guides how the bid should be formatted.
  • RFPs are used primarily by government agencies to get the lowest possible bid.
  • RFPs allow the requesting company to get multiple bidders.

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