RFP is a method of seeking or inviting proposals. Government organizations, public sector undertakings and large institutions often resort to RFP to ensure transparency and competitive bids from competent bidders.
While issuing an RFP, the organization concerned specifically lays down all the relevant details of the requirements. To make the RFP highly participative, these are publicized in the newspapers and are given wide publicity.
Let us take the example of a bank issuing an RFP inviting bids from consultants for undertaking a comprehensive management study. The RFP is a document that has been drawn up with due care. The RFP serves the purpose of inviting bids from the interested parties.
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The RFP documents should necessarily contain the following:
1. A brief description of the party calling for RFP 2 Whether the bids have to be submitted in two parts, viz, technical bid and price bid
3. Specific eligibility conditions for the bidders
4. Scope of the study or work
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5. Selection criteria such as credentials, exposure, prior experience, etc.
6. Price schedule, i.e., how the price is to be quoted, whether in Indian rupees, escalation clauses, taxes, etc.
7. Commercial terms and conditions such as terms of payment, documents to be submitted, etc.
8. Validity period and last date
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9. Arbitration and applicable laws
10. Cancellation of the contract and compensation
11. Confidentiality obligations
Those responding to the RFP should scrupulously follow these requirements and submit their complete proposals.