RFP and RFx definitions: A proposal and procurement glossary from A-Z
RFP and RFx definitions: A proposal and procurement glossary from A-Z
If you work with RFPs and proposals, chances are you’ve run into the term ‘RFx’. But, what is an RFx exactly? Great question. An RFx is a catch-all term that refers to any document that is a ‘request for’ something. Indeed, the ‘x’ stands for various kinds of requests. For example, an RFP is a request for proposal. RFQ may stand for request for quotation. Alternatively, it may stand for request for qualification. In addition, an RFI is a request for information. All of these RFx definitions — and lots of others — are commonly used in the RFP and proposal process.
Every industry has a language of its own, and the RFP and procurement world is no different. Naturally, procurement and proposal professionals, and the people who interact with them, use a vocabulary full of RFP abbreviations, acronyms, synonyms and jargon. Whether you’re new to RFPs or a seasoned veteran, you may find it difficult to decipher and navigate these industry-specific terms.
In this blog, which you can download as a PDF for quick reference, you’ll find a rundown of RFx definitions and procurement terminology. Explore each definition and all of the related terms to become an expert in all things RFP, RFx and beyond.
Acceptance criteria — Factors used to determine whether a product or service meets the required standard, frequently used in software procurement. Also referred to a minimum qualifications or minimum requirements.
Agreement — A legally binding contract, signed and executed by both the buyer and seller. Generally, the parties negotiate the agreement during the RFP process. Then, after execution of the contract, the buyer announces the RFP winner.
Alternate response — A substitute response representing a significant, but intentional variation to a provision or clause of a solicitation by a vendor.
APMP — The Association of Proposal Management Professionals is an international professional organization that educates and advises procurement professionals.
For more information about the association and their events, visit APMP.org.
Approved supplier list — A list of suppliers who have been vetted and pre-qualified based on the established criteria. For example, typical qualifications include financial stability, compliance, insurance, health and safety policies and so on. This supplier list is often managed using vendor profiles.
APS — American Purchasing Society. An organization of buyers, purchasing managers, executives and others interested in the purchasing profession. The organization focuses on providing training and education through certification programs.
Balanced scorecard — A tool to measure vendor performance that factors in multiple variables. The variables may be equally important or have weighted degrees of importance. This practice is similar to weighted scoring.
Benchmarking — Comparing an element of one business, such as price, quality or service, against another. This process may be part of vendor selection.
Best and final offer (BAFO) — A request for the vendor to make a revised pricing proposal with their best possible price. Generally, this request is made when the buyer wishes to encourage competitive pricing and accelerate negotiations.
Best value — The end result of a successful RFP and procurement process. An outcome that perfectly balances price and quality to meet the buyer’s needs.
Bid — The portion of the proposal that offers a price for goods or services. Occasionally, this may be the term used to describe the proposal document.
Bid/no-bid discussion — The RFP bid/no-bid process is a step in the proposal process that occurs before the proposal team begins preparing their RFP response. It serves as a way to consider various factors that will influence the viability and prioritization of a project.
Bidder — Also known as a tenderer or respondent, this is a potential supplier who responds to the RFP with a completed proposal including a bid.
Boilerplate — Text and graphic responses that are stored in a knowledge library for repeated use in multiple proposals.
Business case — An internal document that presents an argument for pursuing a particular action. For example, it is common to prepare a business case for purchasing a particular solution or to support the pursuit of a particular RFP opportunity. Particularly, the document focuses on the expected outcome and benefits of the action.
Additionally, the same term may also be used to describe a section of a proposal designed to give the customer justification for accepting the bid and making the purchase.
Buyer — The party that intends to buy a service or product. In pursuit of this goal, they prepare and issue an RFP to evaluate their options. Alternatively, the buyer may also be referred to as an issuer or purchaser.
C – D
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Capture management — The process of strategizing how to gain an advantage and win an upcoming RFP. Specifically, capture management involves gathering competitive intelligence, networking and developing an understanding of the buyer’s needs.Capture management may also be referred to as capture planning.
Change management — When a company prepares for, plans and manages through a departmental or organizational change. Furthermore, change management offers a foundation for reducing risk and improving communication while ensuring a successful transition to a new system or process.
Closing date — The due date when all proposal submissions must be completed and returned to the issuer or buyer. Also known as a submission due date.
Competitive bidding — Used in government, this is a public bid that solicits companies to submit their best proposal to compete for a specific project. Often legally required, competitive bidding is intended to create an open, fair and transparent procurement process.
Cooperative purchasing — When two or more business or government units combine similar requirements to issue an RFP. The combined entity takes advantage of better terms due to higher volume and/or to reduced administrative expenses. See also group purchasing.
CPO — Chief procurement officer or chief procurement and supply director. This role is responsible for managing overall procurement and supply within an organization.
CPP — Certified Purchasing Professional, a designation bestowed by the American Purchasing Society in recognition of purchasing knowledge, experience and integrity. The CPP is also a prerequisite for the CPPM, Certified Professional Purchasing Manager.
Debarment — When a person or business is no longer allowed to receive RFPs. Most often Issued by government entities after an offense or failure to meet performance expectations, the debarment may be temporary or permanent.
Due diligence — An assessment of the risks involved in the supply chain and procurement process. It often takes into account company stability, policies and employee training and is evaluated using a due diligence questionnaire.
E-sourcing — An online business-to-business procurement process that uses web-based applications where buyers locate potential suppliers, select and review products. These platforms enable businesses to complete transactions directly over the internet. E-sourcing is also known as e-procurement.
Elevator pitch — A concise explanation of the benefits of doing business with a particular vendor. Typically the pitch is under 30 seconds, or roughly the length of an elevator ride.
Executive summary — A short summary of the key proposal components that is written for senior-level decision makers in the issuer’s organization. Also known as a management summary.
Group purchasing organization — Also called a GPO, a group purchasing organization brings together the needs of small- and medium-sized businesses to increase their buying power. In some cases, using a GPO can be a good RFP alternative.
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IFB — Invitation to bid, also called a sealed bid. Often it is competitive, and the lowest bid wins.
Imperfect competition — When a buyer issues an RFP to several vendors that each sell a slightly (or significantly) different product to meet the buyer’s need. Unfortunately, this makes clear comparisons and vendor scoring difficult.
Issuer — The business or person that creates and sends an RFP to vendors, soliciting proposals with the intent to buy a product or service. See also buyer.
Issues — Concerns of the buyer that must be addressed by the bidder. Issues may or may not be directly stated in the RFP. In addition, items at issue may be emotional rather than concrete.
ITT — Invitation to tender, often used in construction projects with many specifications, performance expectations and requirements for vendors to meet.
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Joint venture — When two or more businesses partner to deliver a proposal, win the business and deliver the agreed-upon products or services.
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Knowledge library — Also called a knowledge base, proposal content library or content repository, this is a searchable, centralized location where RFP and proposal content is stored, indexed and retrieved. Often to facilitate remote work, the knowledge library is stored on a cloud-based platform.
Knowledge management — The practice of regularly updating, organizing, indexing and managing proposal content within a knowledge base. Businesses that issue or respond to many RFPs a year may use a knowledge base built in Excel or a collaborative knowledge base in an RFP software platform.
KPI — Key performance indicator, measurable values that can be monitored to determine levels of achievement. KPIs are useful for successful vendor evaluations and vendor management.
L – O
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Letter of intent to bid — A formal letter to a buyer, written by a vendor to indicate their plan to prepare a proposal or decline to bid in response to an RFP. See an example and learn more here: How to write a letter of intent to bid.
Life-cycle cost— An evaluation that determines the cost of acquisition, operation, maintenance and disposal of items. Helpful in determining whether or not to enter into the procurement process or renew existing contracts. This metric is often used in strategic sourcing.
Lowest responsible vendor — The lowest-priced vendor with acceptable performance, reputation and financial evaluations.
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Motivators — Motivators to buy are the fundamental reasons behind the customer’s need to make a purchase. Also known as hot-button issues.
Multiple award — When a contract is granted to more than one bidder who meets the requirements of an RFP.
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NASPO — National Association of State Purchasing Officials. A non-profit association that helps state procurement through education, professional development and research.
NASPO offers a variety of tools and resources for government procurement professionals. Visit the NASPO website to learn more.
NIGP — National Institute of Governmental Purchasing: The Institute for Public Procurement is an association that promotes best practices and professional development for government procurement professionals.
No bid — The response when a vendor is invited to the RFP process but does not wish to submit a proposal. The response allows the vendor to prevent potential suspension for failure to submit a response.
Offer — An invitation to enter into a legal contract.
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Preference — An advantage granted to a vendor because of the vendor’s location or other business classifications. For instance, an RFP may state a preference to partner with a small business or minority-owned organization.
Pricing tables — A tool that allows buyers to collect, analyze and present vendor pricing data in one clear format to determine which vendor best suits the organization or client’s needs.
Proactive proposal — Also called an unsolicited proposal. A proposal that is created without an RFP, often following a discussion with the potential customer.
Procurement manager — The professional in a business responsible for finding, evaluating and selecting vendors that will best meet the needs of the organization. Often, the procurement manager leads the RFP process.
Procurement process — Obtaining goods or services. The process includes defining requirements, issuing an RFP, selecting a vendor and contracting. Furthermore, the procurement process may involve steps after the initial purchase. For instance inventory control, traffic and transportation, receiving, inspection and disposal operations may all be necessary elements of procurement.
Project implementation plan — A project implementation plan breaks down a project into the distinct steps required to accomplish a particular goal. Within the plan, each step has an owner and a due date. Often, the goal of the plan supports larger business objectives.
Proposal — An offer, submitted in response to a request from an organization, that provides a solution to a problem, requirement or objective as outlined in the RFP. Also called an RFP response or bid.
Proposal automation — Using technology to complete steps within the RFP response process. Typically, proposal automation helps match RFP questions with answers in your knowledge library, assign tasks and send notifications to respondents and create progress reports.
Proposal compliance matrix — A organizational tool used to identify and verify that a proposal meets all of the stated RFP requirements and criteria. Often, the proposal compliance matrix is built in a spreadsheet program like Excel is used to create a complex compliance grid. It may also be called an RFP compliance matrix, compliance traceability matrix or proposal matrix.
Proposal development consultant — An external expert or firm hired by a business to assist with proposal management. Accordingly, the proposal development consultant may provide proposal project assistance, a knowledge library audit or proposal process training.
Proposal management — The practice of organizing an RFP response using knowledge management, project management and data analysis.
Proposal rejection letter — Correspondence prepared by the buyer to inform vendors that their proposal has not been selected to win an RFP. Generally, the rejection letter states which vendor won the contract and some of the decision factors considered.
Proposal review — The process of examining a draft or final RFP response to ensure it is complete, accurate and compelling. Often, proposal review includes identifying inconsistencies and refining messaging as well as checking for errors and typos.
Proposal management software — Typically shortened to just proposal software, this cloud-based technology enables a seller to answer a buyer’s request for proposal (RFP) using knowledge management, collaboration and automation functionality.
Proposal team — The group of professionals in a business that work together to create RFP responses. Generally, the proposal team includes people from the proposals, sales, marketing, legal, finance and operations teams.
Proposal template — A proactively created document that enables businesses to build proposals by inserting customized information into an established outline or fill out a proposal using an established format.
Proposal timeline — A chronological roadmap of the proposal process. Often used as a proposal project management strategy, the proposal timeline outlines specific steps and keeps the proposal team in sync.
Proposal writer — A proposal team member responsible for writing RFP responses as well as editing contributed answers from stakeholders and subject matter experts.
Public procurement — Government purchasing funded or supported through taxation.
Q – R
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Qualified bid — A proposal where the potential supplier has exempted themselves from one or more of the requirements of the RFP. The proposal should state exactly why it does not meet the requirements.
Qualified vendor — Also known as a responsible vendor. A vendor that meets minimum requirements in business competence, reputation, financial ability and product quality and has earned placement on the vendor list.
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RACI matrix — A grid used for proposal project management. Indeed, the grid details chronological steps in the proposal process as well as which team members are responsible, accountable, consulted and informed.
To download a RACI matrix and explore more about this project management approach, visit this blog: RACI matrix.
Responder — The person or business that submits a response to an RFP. Also known as the vendor, seller or respondent.
Response — The offer received from a vendor in response to an issued RFP. Commonly referred to as offers, bids, quotes or proposals.
Responsive bidder — A bidder whose proposal meets the exact specifications and terms set out in the RFP or invitation to bid.
RFA — Request for application, an announcement that grant funding is available. An RFA informs researchers and organizations that they may present grant proposals.
RFB — Request for bid. The same as an RFP, request for proposal. Responses are not generally subject to negotiation.
RFI — Request for information, a document used to gather general information from suppliers, often before a formal procurement process. An RFI enables buyers to plan a future procurement project and is not a commitment to make a purchase. When a business has a challenge but isn’t sure what solutions might meet the need an RFI is a good start.
RFP — Request for proposal, a document that requests a proposal from selected vendors. Price is generally a factor in determining the vendor of choice, but not the only consideration. Also known as an RFT, request for tender in Europe.
RFP consultant — An expert in issuing RFPs, an RFP consultant may manage the RFP process including creation, administration and evaluation. In addition, they may also provide training, expert advice or industry insights.
RFP cover letter — A one-page document introducing your proposal to the buyer.
RFP evaluation criteria — A list of business needs and expectations that a buyer uses to score proposals from prospective vendors. Ideally, the RFP evaluation criteria are provided to vendors as well as proposal evaluators to ensure fairness and consistency in scoring.
RFP data — Any information involved in the RFP process that can be quantified, extracted and tracked. For example, historical bid information, vendor financial stability, customer counts, unit prices, etc.
RFP database — A centralized collection of open RFPs. Often, these RFP databases contain government RFPs that are open during a specific public bid period.
Want to know where you can find more RFPs? Learn everything you need to know here: How to find RFPs.
RFP lite — A short, simple RFP format with a limited number of deal-breaker questions. The goal is to reduce the time required to select a vendor. Often, the RFP lite is preceded by a request for information, request for qualifications or vendor profile that is used to collect background and general information.
RFP presentation — The stage in the RFP process when vendors present their proposal in a live or virtual meeting. Often, this step follows the submission of proposals and serves to help narrow the list of potential vendors to a final selection. A typical RFP presentation includes an oral exploration of the RFP as well as follow up questions and demonstrations.
RFP process — Also referred to as the procurement process. A systematic series of actions and steps designed to help businesses evaluate and select the right vendor or supplier for their business. Inefficiency within the RFP process results in long procurement times as well as increased costs and risk.
RFP project management — The practice of answering an RFP using a methodical, organized approach. Generally, the goal of RFP project management is to improve the predictability, repeatability and efficiency of creating proposals.
RFP questions — The body of the RFP used to solicit specific information from potential vendors. Typically, RFP questions may be true or false, yes or no, multiple choice or open-ended.
RFP requirements — The individually stated needs of a buyer as outlined in the request for proposal. RFP requirements are gathered from stakeholders within the buyer’s business and are the foundation for the need statement, project scope and scoring criteria.
RFP software — Often cloud-based, an RFP platform serves RFP issuers, responders or both. Indeed, RFP software digitizes the entire RFP process. Features include, a searchable knowledge library, RFP and proposal automation, digital RFP templates, question and answer audits and internal and external collaboration.
RFP strategy — An RFP strategy is how your business receives, reviews and approaches requests for proposals. In addition, it clearly defines goals and expected outcomes. Finally, an RFP strategy serves as a guide for decisions to bid or not to bid.
RFP template — An existing RFP that can be copied and customized to speed up the procurement process. RFP templates are widely used and are often proactively provided by vendors to assist potential customers.
RFP timeline — A chronological list of milestones and deadlines throughout the RFP process. Usually this timeline includes the date the RFP is issued, a question and answer period, proposal submission deadline and the expected final decision date.
RFQ — A request for quote or quotation is an RFx form that outlines a buyer’s requirements and asks vendors to provide pricing and payment terms. Generally, the lowest priced bidder will win the business.
RFQ — A request for qualifications is issued to find out which potential vendor has the most expertise for a specific project. It asks questions and explores the company’s experience, capabilities, customer referrals and past performance. RFx — Collective term that all references to request for information (RFI), request for proposal (RFP), request for quote (RFQ), request for bid (RFB) and more.
Solicitation — The process of communicating procurement requirements and requesting responses or bids from interested vendors. Also called a request for bid and request for proposal.
Spend analysis — Spend analysis is the practice of collecting, classifying and analyzing data to decrease procurement costs, improve efficiency and monitor compliance.
Strategic sourcing — A procurement process that uses ongoing evaluation of the purchasing activities of a company to reduce cost and improve quality. Strategic sourcing is a key part of any vendor management initiative.
Tender —The process that allows governments and financial institutions to solicit bids for large projects. Each tender has a specific deadline for submission. Used commonly in Europe, referred to as a proposal in North America.
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Unsuccessful vendor — An unselected vendor. The proposal may be declined due to price, quality, failure to comply with specifications and so on.
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Vendor— Also known as a seller, responder or bidder. The person or vendor responding to the RFP with the goal of providing a service or product.
Vendor management — Also known as supplier relationship management, the practice of improving a vendor’s impact on the buyer’s business by working collaboratively and developing new processes.
Vendor evaluation — A part of vendor management. The periodic process of evaluating and approving new and old suppliers based on how well they meet the business’s needs. To properly evaluate a vendor, you must establish KPIs and determine the vendor’s value and quality.
Zero-sum game—An interaction where every gain by one party is an equal loss to the other, so the net gain is zero, also a word to include in your A-Z guide so you have a Z.
RFx definition we missed?
The terminology and definitions used in procurement are always changing, evolving and expanding as time goes on. I’m sure that in a year or so, our RFx definitions will almost certainly need to be expanded to include other common request documents. We will strive to continuously update this glossary to offer quick, easy answers to common questions like, “What is RFx?” and “What is an RFI?”
I know I haven’t covered every relevant and related term in this RFP glossary. If I’ve missed a key term or omitted some nuance in these RFP definitions, please reach out and let me know. We’d all be thrilled to hear from you on Twitter or LinkedIn.
Originally published October 24, 2019 — Updated July 14, 2021