A request for offer (RFO) is a document that companies use when they want to buy something or hire a service. It's similar to other procurement documents, but with a twist - it gives vendors more freedom to propose their own solutions.
In this guide, we'll break down everything about request for offers. First, we'll cover what it is and when to use it. Then, we'll walk through the complete process step by step. Finally, we'll show you some real examples.
What is an RFO?
An RFO (request for offer) is a document that buyers use to collect proposals from different vendors. You describe what you need, share your project requirements, and then ask vendors to submit their best offer on how they'd solve your problem.
What's the difference between an RFO and an RFP, RFI or RFQ?
Here's what makes RFOs different: Unlike RFPs, RFIs and RFQs, an RFO doesn't force vendors to follow a strict question-and-answer format. Sure, you might ask a few specific questions, but vendors get to structure their response however they want. This gives vendors room to be creative and show you unique solutions. The downside? It's harder to compare responses side-by-side because everyone's proposal looks different.
When to use an RFO
An RFO works best when you know you have a problem but you're open to hearing different ideas on how to fix it. Just make sure to give vendors some guidelines so they don't go completely off track.
RFOs are perfect for:
Hiring consultants or professional services
One-off projects
Smaller projects where you're the main decision maker
Keep in mind: While pricing should be included, it shouldn't be your only deciding factor when using an RFO.
Guide to the request for offer process
The RFO process has three main phases: creating it, sending it out, and reviewing responses.
1. Creation
First, you need to build your RFO document from scratch.
Define your need:
Start by getting crystal clear on what problem you're trying to solve and what a good solution looks like. You might need to talk to a few people on your team to really understand the issue. This clarity will help you through the entire process.
Establish your timeline:
RFOs should move fast, but you still need a plan. Figure out:
When you'll send the RFO to vendors
How long vendors have to ask questions
When responses are due
When you'll announce the winner
Write your RFO:
Now put it all together. Keep it short - just a few pages. Your RFO should include:
What the project is about and what you're trying to achieve
Scope of work
Timeline and deadline
Any specific questions vendors must answer
Requirements for submitting a response
Pro tip: Set some basic requirements like minimum qualifications, budget range, and a page limit for responses. This helps filter out proposals that won't work before you waste time reviewing them.
2. Administration
Time to get your RFO out there and manage the process.
Send or publish your RFO:
If you already have vendors in mind, send it directly to them. Try to keep it to six vendors or less - more than that makes evaluation really tough. If you work for a government agency, you might need to post it publicly so any qualified vendor can respond. Either way, using proposal software makes collecting and organizing responses much easier.
Answer follow-up questions:
Your most interested vendors will probably have questions. That's good - it means they care. Answer their questions to help guide them in the right direction.
Here's a smart approach: Collect all the questions you get and share the answers with everyone. This keeps things fair and transparent.
3. Evaluation
The final phase - reviewing what vendors sent you and picking a winner.
Review the offers:
Once the deadline passes, gather all the responses. First, check if they meet your basic requirements. Then dig into each proposal and see how well they solve your problem. Score each one using a comparison chart. Get other team members involved if they need to weigh in on the decision.
Selection or next steps:
Ideally, one vendor stands out as the clear winner - great solution, reasonable price. If so, move forward and work out a contract. With RFOs, expect a bit more back-and-forth negotiation than usual since the process is more collaborative. Still unsure? Look closer at your top three options. You might even want to send out a formal RFP to get more detailed information before making your final choice.
RFO examples
Sometimes the best way to learn is by seeing real examples. Here are a few:
Information technology goods and services RFO example
California Courts put out an RFO looking for various IT services. Their document included background info, what services they needed, timeline, and how they'd evaluate responses.
Cloud services RFO example
The Texas Comptroller of Public Accounts published this RFO when searching for cloud services. It had detailed background, scope, requirements and process guidelines for vendors.
RFO for assessment of ADA physical work requirements example
Prince William County Service Authority used an RFO to find a contractor who could review physical work requirements in 70 job descriptions. They clearly outlined the objective, scope, and how they'd evaluate proposals.
Conclusion
RFOs give you flexibility in procurement. They let vendors bring creative solutions to the table instead of just answering your questions. But they need clear communication upfront so vendors know what you're looking for. Follow this guide and you'll run a smooth RFO process that gets you good results.
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