Formal Corporate Proposal Routes – RFP, RFQ, PSL
by Davina Schonle | Aug 19, 2021 | Business
We often get asked about some words that might be thrown around by your corporates contacts that may leave you confused but is a formal route you may have to go through. These are RFP and PSL. So let me example what
Request for proposal (RFP)
An RFP is often used by highly regulated companies, the Government, the NHS and some larger companies. The purpose of an RFP is to entice competition, this is often to do with cost – so whoever’s the cheapest wins – not always necessarily about results or suitability.
It can be a pre-cursor to tender’s which we won’t cover here. That’s a whole other ball game.
When completing an RFP:
● Follow all the rules and ensure you complete all sections.
● Ensure you stick to the deadlines.
● It’s really important so we’ll say it again – Don’t miss anything!
● During this time you may not be able to engage in conversations with the business.
● Timeframes for an RFP can vary considerably but could be more than a year.
Request for Quote (RFQ)
They know what they want from you, they just want to know the cost. Normally this would be an ‘off-the shelf’ solution and may be a bulk buy. So it could be they have seen a product or service you offer online (like an e-learning module) and they would like a discount based on the number of users.
If you are a service-based business I suggest that you consider both RFP’s and RFQ’s but please be aware that this is sometimes a very competitive marketplace that can drive down prices. However, I know people who make a lot of money by working with these, likewise, I know a lot of people who waste a lot of hours working on these types of opportunities.
Preferred supplier list (PSL)
A PSL is a list of companies that the organisation has approved to be able to do business with, with the intention of removing all the lengthy internal processes for approval of a new supplier/vendor.
The PSL is often managed by Procurement departments, Supply Chain or HR and the list is reviewed at a set frequency throughout the year, this could be annually or quarterly. It can be a very lengthy process to be added to a PSL list and expect to be negotiated with annually – they are tasked with bringing down the cost and often incentivised to do so with a bonus.
Sometimes there are different tiers within a PSL. If the first tier, the preferred supplier, can’t satisfy the businesses needs then they would then go to the second tier.
But don’t fear if you are not on the PSL list… it does not mean you can’t get opportunities with that organisation, there are ways to navigate around these in many organisations which we help with.