Procurement documents or bid packages are designed to elicit particular types of responses. The type of response (from the vendor) desired by the buyer depends on how well-informed they are about their own needs. The following are examples of procurement documents or terms you may encounter.
EOI – Expression of Interest
An EOI may be used very early in the procurement process to aid in planning. It is a request for input from vendors on how best to solve technical or procurement problems. Knowledge gained from the process is then used to develop the final bid documents.
It is common for vendors to assist in the writing of SOW statements. A collaborative approach to the planning process helps to ensure that the SOW can be readily interpreted by the vendor community.
RFI – Request for Information
An RFI is similar to an EOI. It is asking potential vendors to help a buyer decide what to buy. Most vendors are anxious to comply, because it helps them learn exactly what the buyer is after.
IFB -Invitation for Bid
The term “IFB” is used after the procurement documents are fully developed and the buyer knows exactly what he or she wants (scope is clearly defined).
The seller is being asked for a bid to deliver the goods and services as described. IFBs are anticipating a response in the form of a fixed price quote.
RFP – Request for Proposals
The term “RFP” is used when solutions are being requested. An RFP implies a “cost plus” response. Vendors are being asked to explain how they would meet the needs of the buyer, what makes their skill set unique and what the probable cost would be.
RFPs are used when the scope is ill defined or vague, either because of urgency or technical uncertainty.
Requests for Quotes
An RFQ is used to solicit fixed price bids. The name implies that the buyer knows exactly what she/he wants (clearly defined scope) and is looking for a firm, fixed price.
“Tender notice” is the term used by government agencies and some large corporations in place of “procurement notice,” or, “the following are going to be purchased.” A tender notice may then request responses in any of the forms listed above.
Invitation for Negotiation
An invitation for negotiation is actually used after procurement planning and during “conduct procurements.”
Vendors are invited to participate in negotiations only after their bids have been selected as the best.
An invitation does not mean that a contract will be signed. It only implies that the vendor who receives it has been selected as one of the best suppliers and is being asked to discuss the details of their bid.
Next week I will explain the ingredients of a “bid package.”