Answer to Question #176950 in Economics for Charmaine Nompilo Zuma

Question

Discuss the source you would utilise to increase the pool of potential suppliers who be invited to tender

Answer 1

By applying RFP when searching for a counterparty, the purchasing organization informs a wide range of suppliers about the planned purchase. By this action, the customer encourages the supplier to submit a more advantageous offer than with a personal contact. Supplier understands that procurement is competitive and competing organizations will also participate in the RFP. In recent years, such a counterparty determination procedure has become widespread. In order to comply with the principle of reaching a wide range of people and to involve more participants in the RFP process, it is recommended to make a request for proposals on specialized electronic RFP sites on the Internet.

The request formulates the goals, requirements for the project, product, or service, defines the criteria for the quality of the product or service, and also declares the criteria for selecting a supplier.

The request can dictate the structure and format of the vendor bids to enable bid matching.

Previously, the terms request for quotation and request for proposal were used exclusively in international trade, however, since the adoption of laws governing public procurement, the request for quotation is a mandatory procedure in determining the initial bid price.

In the military, a request for proposal is often used to support operational requirements, after which the procurement department issues a detailed Technical Specification on which potential contractors will submit their proposals. In civilian use, a project application is usually part of a complex sales process, also known as corporate sales.

Bidders return the offer on the date and time specified. Late bids may or may not be considered, depending on the terms of the initial request. Bids are used to assess the suitability of the applicant as a supplier, vendor, or partner. Proposals can be discussed (often technical details are clarified or errors in the proposal are noted). In some cases, all or only selected applicants may be invited to participate in subsequent proposals or may be asked to submit their best technical and financial proposal, usually called Best and Final Proposal.