Determining Procurement Methods


A major factor in the planning process of any purchase is the procurement method that is to be utilized. For example, there are significant differences in lead times when considering either a Request for Bid or a Request for Proposal. Procurement Services can provide assistance in selection of the procurement method and in the due diligence process itself.

Request for Bid (RFB)- A document issued to prospective bidders to obtain pricing for a specified quantity of an identified product. Specifications in the request should include availability and delivery requirements as well as acceptable order terms such as warranty period, return policies, payment of shipping costs, etc. For Baylor's general terms and conditions, go to terms.

Request for Proposal (RFP) - A document issued to prospective bidders requesting a "best solution" based on specifications and a defined scope of work. Evaluation of proposals involves a team effort and typically includes consideration of lowest price and other weighted evaluation criteria listed in the RFP.

Request for Qualifications (RFQ) - A document issued to prospective bidders to develop a short list of most qualified bidders to compete in the RFP process.

Request for Information (RFI) - A non-binding document issued to obtain information about the products/services offered by prospective vendors. RFIs are not generally used to obtain price information but may be used as a means to pre-qualify vendors and to assist in the development of either an RFQ or RFP.

Overview of the RFP Process

The RFP process begins with identifying a need for goods or services, examining historical usage, identifying prospective bidders, identifying customers/ departments and selecting an evaluation committee. Next steps include the development of a scope of work, identification of evaluation criteria, and writing the RFP to include Terms & Conditions and a timeline for deliveries.

If needed, a pre-proposal conference may be held to answer questions and refine the requirements of the RFP. This is also an excellent time to conduct site visits to familiarize bidders with the work site. Any changes to the RFP are issued as Addenda.

After proposals are received, the evaluation committee scores each proposal against the evaluation criteria and, based on the scoring, provides a recommendation for award. Presentations by bidders may be required for clarification.

When Should an RFP Be Utilized?

A formal RFP is not required for goods or services when price is the sole justification. In general, an RFP is needed when the product/service required and the expected contract performance, terms, and conditions cannot be completely described by a detailed specification attached to a purchase order. Because of the time commitment involved in the RFP process, this procurement method should normally be utilized when the procurement of a product or service will exceed $100,000 annual cost to the University.

The table below is provided to assist in making the appropriate choice in selection of a procurement method. As a reminder, departments should first refer to any current applicable agreements directing them to use a specific supplier.

Procurement Method

Use When

Advantages

Disadvantages

Request for Bid

Lots of competition exists.

The product or service is available from more than one source.

Award process is simpler. 

Award is made to the responsive qualified bidder providing the best value.

Defined specifications may be difficult to develop.

Does not always encourage innovative solutions. 

Request for Proposal 

Factors other than price are evaluated.

Negotiations are desired.

Prospective bidder is expected to provide innovative ideas. 

Allows for customized proposals suggesting different approaches to the same business need.

Allows for negotiations in order to obtain the best value.

 

Lead times for procurement are much longer.

Evaluations are more complex. 

 

 Request for Qualifications

 

Selection is made solely on skills and qualifications of the prospective bidder. Price is not a factor until after a firm is selected. 

Emphasizes the competency of the prospective bidder. 

Firms are selected before price is negotiated. 

 Request for Information

There is insufficient information to write specifications for any procurement method. 

Provides information to prepare a complete bid or proposal document.

Allows the business community to have input into the solicitation document based on current industry practices and market factors.

Identifies any potential problems early in the procurement process

 

Lengthens the procurement process.