What Is an RFP (Request for Proposal)?

A plain-English guide to requests for proposal

An RFP (request for proposal) is a document an organization sends to potential suppliers that describes what it needs and asks each supplier to submit a proposal explaining how it would meet that need and what it would cost. The buyer then compares the proposals against the same criteria and chooses a supplier.

This guide covers what RFP stands for, what it means in business, when to use one, what goes in it and how the process works. To write one, start from a free, vendor-neutral template in the rfphub RFP examples library.

What does RFP stand for?

The RFP acronym stands for request for proposal, sometimes written “request for proposals”. The proposal is the supplier’s answer: a document that describes its solution, approach, team and price, and explains how it meets each requirement. It’s pronounced as letters: R-F-P.

RFP has other meanings outside purchasing. In biology, for example, it stands for red fluorescent protein. In business, procurement and government contracting, RFP means request for proposal. Some organizations, particularly outside the US, call a similar document a request for tender (RFT) or an invitation to tender (ITT).

What is an RFP in business?

In business, an RFP is a structured, competitive way to buy something complex. The buyer knows the problem it needs solved and the outcome it wants, but it wants suppliers to propose how to get there. Because every supplier answers the same questions in the same format, the buyer can compare very different offers side by side and record why it chose one.

RFPs suit purchases where price is only part of the decision: enterprise software such as ERP or CRM systems, IT and managed services, cybersecurity tools, consulting and construction projects. Two suppliers can meet the same need in different ways, and the differences in approach, risk, support and long-term cost matter as much as the headline price.

An RFP also makes the buying team agree on requirements before talking to vendors, and it leaves a written record of how the decision was made.

When should you use an RFP?

An RFP is worth the effort when several of these are true:

  • The purchase is complex, expensive or hard to reverse, such as a system many teams will use for years.
  • Several suppliers could meet the need, but in different ways.
  • You need to compare suppliers on more than price: functionality, security, implementation, support and contract terms.
  • Several departments have requirements, and you need one agreed list.
  • Your procurement policy, a funder or the law requires a competitive process.

When an RFP isn’t the right tool

  • You don’t know the market yet. If you aren’t sure what products exist, how they’re priced or which suppliers fit, send a request for information (RFI) first and use the answers to build a shortlist.
  • You already know exactly what you want. If every supplier would deliver the same thing, the decision comes down to price and terms, and a request for quotation (RFQ) is simpler.
  • Only one supplier can do the work. For example, an add-on that only the original vendor sells. Follow your organization’s rules for single-source purchases.
  • The purchase is small or low-risk. If running an RFP would cost you and the suppliers more effort than the purchase justifies, use a simpler method your policy allows.

What goes in an RFP?

A well-built RFP for software or IT services includes these sections:

  • Introduction and background: who you are and why you’re buying now.
  • Scope and objectives: what’s in and out of scope, the outcomes you want, and the figures suppliers need to size a proposal, such as users, sites, volumes and systems to integrate.
  • Requirements: functional, technical, integration, security, implementation and support requirements, each marked must-have or nice-to-have.
  • Questions for vendors: specific questions that show how each supplier handles your hardest cases.
  • Response instructions: format, deadline, how to submit, who to contact and how to ask questions.
  • Evaluation criteria: what you’ll score and how much each criterion counts.
  • Pricing format: a table that makes every supplier price the same items the same way, including one-time costs, recurring fees, services and renewal terms.
  • Timeline: key dates from issue to award.
  • Contract terms: your key terms, confidentiality rules, and how vendors should flag exceptions.
  • Attachments: references, security documentation and, if you have one, a draft statement of work.

Public-sector rules offer a useful minimum. In US federal purchasing, FAR 15.203(a) says an RFP for a competitive acquisition must, at a minimum, describe the government’s requirement, the anticipated terms and conditions, the information required in the offeror’s proposal, and the factors and significant subfactors that will be used to evaluate proposals and their relative importance. Private buyers aren’t bound by the FAR, but those four items make a good checklist.

How the RFP process works

  1. Define the need. Agree the problem, scope, budget range and outcomes, and collect requirements from every team the purchase affects.
  2. Set the scoring criteria. Decide who evaluates and how much each criterion counts, before anyone reads a proposal.
  3. Research the market. Build a long list of suppliers. If the market is unfamiliar, send an RFI to create a shortlist.
  4. Issue the RFP. Send it to the shortlist, or publish it if your rules require an open process, and allow a realistic response window.
  5. Answer questions. Take vendor questions in writing by a set date, and share every answer with all bidders.
  6. Evaluate and shortlist. Have each evaluator score independently, set aside proposals that miss a must-have, and ask the top-scoring suppliers to demonstrate with your scripts and sample data.
  7. Negotiate and award. Check references, negotiate price, terms and the statement of work, sign, and tell the other bidders the outcome.

Who issues RFPs?

Private companies

Companies use RFPs for large or complex purchases, guided by their own procurement policies. A private company generally decides for itself which suppliers to invite, how to evaluate them and whether to negotiate, within the law and its existing contracts.

Public agencies

Government bodies at every level issue RFPs under procurement rules that can govern how opportunities are advertised, how proposals are evaluated and how unsuccessful bidders can challenge an award. The rules differ by country, state and agency.

For US federal agencies, the main rulebook is the Federal Acquisition Regulation (FAR). FAR 2.101 calls solicitations under negotiated procedures “requests for proposals” and solicitations under sealed bid procedures “invitations for bids”. It says responses to RFPs are offers, called proposals, while responses to requests for quotations under simplified acquisition procedures are quotations, not offers. These references are to the FAR text on acquisition.gov as of October 2026. The FAR is being rewritten under the Revolutionary FAR Overhaul, and agencies can apply deviations, so check the current text before relying on a section number.

Non-profits

Non-profit organizations use RFPs for the same reasons companies do, and sometimes because they must. If a purchase is paid for with grant money, the grant terms may set procurement rules the organization has to follow.

RFP vs RFI vs RFQ

  • RFI (request for information): asks suppliers what’s possible. Use it to learn the market and build a shortlist.
  • RFP (request for proposal): asks suppliers how they would meet a defined need and at what price. Use it when solutions differ.
  • RFQ (request for quotation): asks suppliers to price something you’ve already specified. Use it when every supplier would deliver the same thing.

A complex purchase can use more than one. For a comparison table and a worked software example, see RFP vs RFQ vs RFI: what’s the difference?

Common RFP mistakes buyers make

  • Sending a template without tailoring it. Delete requirements that don’t apply, add your own volumes and integrations, and adjust priorities. Vendors can’t price what you haven’t described.
  • Copying one vendor’s feature list. Requirements lifted from a product brochure favor that product. Describe what you need to do, not how one product does it.
  • Making everything a must-have. If every line is mandatory, nothing separates the suppliers, and you may rule out the best fit over a minor gap.
  • Deciding how to score after reading the proposals. Set criteria and weights first, so the scores reflect your priorities rather than whichever proposal read best.
  • Asking open questions with no structure. “Describe your security approach” invites marketing copy. Ask specific questions, and require vendors to say whether each requirement is met by standard functionality, configuration, custom work or a roadmap item.
  • Withholding the facts vendors need. Without user counts, volumes, current systems and a timeline, vendors guess, and their prices won’t be comparable.
  • Taking “yes” at face value. Ask shortlisted vendors to prove key requirements in a scripted demonstration using your own data, and call references.
  • Comparing only the first-year price. Ask for implementation, training, support, renewal increases and exit costs, and compare the total over the contract term.

How rfphub’s free RFP templates help

rfphub is a free, vendor-neutral library of RFP templates for enterprise software and IT. Every template comes with an editable Microsoft Word RFP you can download, tailor and send. Updated templates, such as the ERP RFP template, also include a selection plan with an example schedule, requirements marked Must-have or Nice-to-have, vendor questions and a weighted scoring rubric.

Browse every template in the RFP examples library, or start from a category:

Frequently asked questions

What does RFP stand for?

RFP stands for request for proposal. It’s a document a buyer sends to potential suppliers that describes a need and asks each one to propose how it would meet that need and at what price.

What is an RFP in business?

In business, an RFP is a formal, competitive way to buy something complex, such as enterprise software or IT services. Every supplier answers the same requirements in the same format, so the buyer can compare proposals on functionality, approach, risk and cost, not just price.

What is the difference between an RFP and a proposal?

The RFP is the buyer’s request: it describes the need and asks for responses. The proposal is the supplier’s response: it explains how the supplier would meet the need and what it would cost.

Who writes an RFP?

The buyer writes it. A procurement lead or project manager can coordinate, but the requirements should come from the people who will use, run, secure and pay for the purchase: for software, the business teams, IT, security, finance and legal.

How long does the RFP process take?

It depends on the purchase. A simple, well-defined purchase can move quickly, while an enterprise software selection with demonstrations and contract negotiation takes longer. As one example, the schedule in rfphub’s ERP RFP template runs about 22 weeks from kickoff to signed contracts.

Is an RFP legally binding?

It depends on the RFP’s terms and the law that applies. In general, an RFP invites suppliers to submit proposals and isn’t itself a contract; a contract is formed later, when a proposal is accepted or an agreement is signed. In US federal procurement, FAR 2.101 defines an offer as a response to a solicitation that, if accepted, would bind the offeror, and it calls responses to RFPs proposals. Ask your legal team to review the terms of any RFP you issue or answer. This isn’t legal advice.

Where can I find a free RFP template?

rfphub’s RFP examples library has free, vendor-neutral RFP templates for enterprise software and IT, from ERP and CRM to cybersecurity and AI platforms. Each one comes with an editable Microsoft Word RFP.