What is a request for proposal (RFP)?

A request for proposal (RFP) is fundamentally a document that organizations use to solicit proposals from potential suppliers or service providers. The purpose of an RFP is to provide a structured way for companies to communicate their needs and requirements for a specific project or service, allowing competing vendors to submit their proposals detailing how they would meet those needs, including pricing, schedules, and methodologies.

RFPs are a crucial element in the procurement process, especially when an organization requires detailed bids from various suppliers to choose the best fit based on predetermined criteria. This process not only fosters competition among suppliers but also encourages innovation as vendors can propose novel solutions to the organization's requirements.

In contrast, other options represent different aspects of contract management and are not correct definitions of an RFP. A document issued to finalize contracts pertains to formalizing agreements rather than soliciting proposals. A formal announcement of contract completion is about closing out a contract rather than starting a bidding process. Lastly, a report on contract performance focuses on evaluating outcomes after a contract has been executed, which again does not align with the purpose of an RFP.