Tenders, proposals, quotations, bids and expressions of interest. It’s natural to be confused by all the different abbreviations used by government and large companies for these different tender-style opportunities.
If you’ve ever looked into responding to government tenders or been invited to tender by a private or listed company, you’ll know that the paperwork and questions can be confusing enough, never mind understanding the difference between these terms.
In practice, whether you’re writing a tender, a bid, a proposal or a quotation in response to a request by government or a company, they are all very similar.
Bear in mind, though, that there are many traps to fall into when writing tenders and proposals. Knowing how to avoid tender writing mistakes and increase your opportunity for writing successful tenders and proposals is a great advantage.
To help you out, below we’ve summarised what RFT, RFP, EOI and RFQ all mean.
What is an Expression of Interest?
Expressions of Interest (EOI) are small tenders. They’re used to gauge the market for a potential service or product that government or a company needs – who’s out there, what they offer.
Unlike tenders, EOIs rarely ask about pricing. They mostly ask about the responding company’s skills, experience and an outline of how they would deliver the project or service.
EOIs are mostly the first stage in a tender process. The company’s or government’s procurement team reviews the EOIs received and uses the information within these to fully scope its needs. From there, a full request for tender (RFT) will be developed.
Respondents whose EOIs successfully address all the EOI questions will be later invited to respond to the request for tender (RFT).
What is a Request for Tender?
Companies and government issue a Request for Tender when they need a supplier for a specific project, service or product.
Requests for tenders are formal. They mostly comprise a series of documents including the scope of works, draft contract and response schedules. Tenderers must complete the response schedules – this is their tender.
The word ‘tender’ is very often used interchangeably with ‘bid’.
If you are responding to a Request for Tender, you become a ‘tenderer’.
The response schedules will ask about the tenderer’s experience, their people and how it will deliver the project. There is also a requirement to provide evidence of insurances, plus often policies regarding quality, environment, WHS and risk management. Tenderers can also be asked about their Indigenous procurement or inclusion plan.
What is a Request for Proposal?
There are three types of proposals.
1. Formal Request for Proposal
Formal requests for proposals (RFP) are exactly like tenders.
A company or government issues a formal request for proposal when it needs a supplier for a project, service or product. Companies responding to a formal Request for Proposal are ‘respondents’.
Requests for Proposals can be very precise about how the service, product or project needs to be delivered. Yet at other times, a request for proposal can be literally that – a request for suggestions (‘proposals’) about how the respondent would deliver the product, service or project.
Writing proposals in response to an RPF can therefore be as challenging as responding to an RFT.
2. Informal proposals
An informal proposal is sent to a prospective client in response to a request from that prospective client for a ‘proposal’ for more information about the company’s product or service, with pricing.
The opportunity to send a proposal often comes after a face to face meeting. Hence, these types of proposals are a means of confirming what was said at the meeting and following-up at the same time.
As there is no formal Request for Proposal, the potential supplier can decide what to include in the proposal. The proposal needs to be a client-focused selling document.
It is important to include a description of the prospective customer’s needs as discussed at the meeting.
The best informal proposals start with an executive summary. They then identify the problem or business opportunity as discussed at the meeting. After that, the prospective supplier defines their solution to the prospective client’s problem. The description of the solution may include a methodology or process, with an illustration. The budget / pricing also need to be included.
As well, the proposal needs to include the potential supplier’s organisational details, including descriptions of past experience in short case studies, results for other clients, and the experience of the account team or individuals who will be responsible for managing and performing the work.
Writing an unsolicited proposal is similar to writing an informal proposal. As there’s no formal Request for Proposal, the potential supplier can decide what to include in the proposal. However, it is still imperative that the proposal is a client-focused selling document.
As the prospective client hasn’t asked for a proposal and there’s been no initial meeting, the potential supplier can’t know what the client’s business issues or challenges are, or if that client really needs their product or service. Therefore, research is needed to identify possible challenges or needs.
For advice on what to include in an unsolicited proposal, read How to Make an Unsolicited Business Proposal.
What is a bid or an offer?
Bids or Offers are when a company is approached by another asking it to ‘bid’ or ‘make an offer’ to provide a service or product. Like proposals, Bids or Offers can be informal or formal.
They can comprise a formal Request for Offer (or Bid) document, which the responding company (the ‘Bidder’ or the ‘Offerer’) has to complete and return.
Alternatively, a Request for a Bid or a Request for Offer can be more relaxed. They can be as simple as an email, asking the recipient to provide its bid or offer to provide its service or product. In these cases, there is no formal response template to be completed.
Other frequent terms
Capability statements are a cross between a brochure and an informal proposal. They sum up a company’s ‘capability’. If a company has more than one skill area, it may have a series of capability statements.
Writing a capability statement requires a brief description of the company’s experience, it’s team, what it does, how it does it and its experience. Case studies are very useful in capability statements.
If you would like to know more about writing EOIs, writing tenders, responding to proposal requests and bids, get in touch with us today on 0411 123 216 or email us at email@example.com.