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The Request for Proposal

April 18 2011

With a request for proposal, a business is sending the message they have the intent to spend money for the requested material to the recipients of this document. This does not mean that the material is going to be purchased, but is likely to be purchased if the price, quantity and delivery time is agreeable.

The request for proposal is a formal document that is sent out in the early stages of a project while it is being planned. An acceptable response must be received by the sending business in order to proceed with the planning stage that involves this material or equipment.

The formatting of a request for proposal should be easy to read and understand by both parties so the line of communication is set in place for a successful transaction to occur if all the conditions are agreeable. This does not always occur, but usually there is some informal communication between the two parties that are discussed to make this procedure a formality.

If more than one party gives a positive response to the request for information, then a bidding war could commence. This is advantageous for the receiving company since most business will discount their product to receive a large order. This information can be included in the request for proposal or as a side note attached so they are aware of the situation.

Included in the request for proposal should be a time limit for the response so this decision will not linger past the point of it delaying your project. In most cases a response can be generated within two weeks. If there is a delay in the response or it is late, this could send the signal that this particular business is not very reliable.

The request for proposal is the business process in which a formal agreement between two companies is formed so the exchange of goods for revenue can take place in a formal manner.