Invitations to Bid

An invitation to bid (ITB) or invitation for bid (IFB) is an invitation to contractors or equipment suppliers, through a bidding process, to submit a proposal on a specific project to be realized or product or service  to be furnished. The ITB is focused on pricing and not on ideas or concepts. An offer given in response to an ITB is a bid, which should not be confused with a quote. “Offer” means a response to a solicitation that, if accepted, would bind the bidder to perform the resultant contract. A quote is not an offer and, consequently, cannot be accepted to form a binding contract.

If not stated otherwise, the contractor or supplier with the lowest bid is awarded the contract, provided that they meet the minimum criteria for the bid. This is in contrast to a request for proposal (RFP), in which case other reasons (technology used, quality) might cause or allow choice of the second best offer.

RFP Solicitations

A request for proposal (RFP) is a document that solicits proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset, to potential suppliers to submit business proposals. It is submitted early in the procurement cycle, either at the preliminary study, or procurement stage.

An RFP is used where the request requires technical expertise, specialized capability, or where the product or service being requested does not yet exist, and the proposal may require research and development to create whatever is being requested.

The RFP presents preliminary requirements for the commodity or service, and may dictate to varying degrees the exact structure and format of the supplier’s response. Effective RFPs typically reflect the strategy and short/long-term business objectives, providing detailed insight upon which suppliers will be able to offer a matching perspective.

RFP’s are focused on more than just pricing and cost, they entail bit of consulting from the contractor or vendor.

In principle, an RFP:

• Informs suppliers that an organization is looking to procure and encourages them to make their best effort.
• Requires the company to specify what it proposes to purchase. If the requirements analysis has been prepared properly, it can be incorporated quite easily into the Request document.
• Alerts suppliers that the selection process is competitive.
• Allows for wide distribution and response.
• Ensures that suppliers respond factually to the identified requirements.
• Is generally expected to follow a structured evaluation and selection procedure, so that an organization can demonstrate impartiality – a crucial factor in public sector procurement’s.

Please email us if you plan on participating in the RFP process so we can add you to the plan holders list. We will then be able to include you on any future emails regarding questions and answers or addenda.

RFQ Solicitations

A request for quotation (RFQ) is a standard business process whose purpose is to invite suppliers into a bidding process to bid on specific products or services. RFQ generally means the same thing as ITB (Invitation to Bid) or IFB (Invitation For Bid).

An RFQ typically involves more than the price per item. Information like payment terms, quality level per item or contract length may be requested during the bidding process.

To receive correct quotes, RFQs often include the specifications of the items or services to make sure all the suppliers are bidding on the same item or service. Logically, the more detailed the specifications, the more accurate the quote will be and comparable to the other suppliers. Another reason for being detailed in sending out an RFQ is that the specifications could be used as legal binding documentation for the suppliers. RFQs are best suited to products and services that are as standardized, as this makes each supplier’s quote comparable.

An RFQ allows different contractors to provide a quotation, among which the best will be selected. It also makes the potential for competitive bidding a lot higher, since the suppliers could be quite certain that they are not the only ones bidding for the products.

Please email us if you plan on participating in the RFQ  process so we can add you to the plan holders list. We will then be able to include you on any future emails regarding questions and answers or addenda.