When it comes to the management side of construction, the RFP process can be intimidating.
Knowing when to bid and how to decline an RFP can feel mysterious, and creating a quality RFP that accurately represents your project can seem daunting.
At CM Fusion, we get it.
As contractors, we have been on both sides of an RFP and we know first-hand that this process can be difficult.
This guide will help you understand what an RFP is, how to write one, and how to respond to one.
Here at CM Fusion, we know that the management side of the construction world can be anything but enjoyable.
CM Fusion was created by a group of general contractors who know the pain of over-complicated project management systems and too-hard-to-manage paper trails.
We teamed up with software engineers and built the software we wished we had always had.
And we made sure to include RFP management in the plan.
CM Fusion can help you automate your RFPs and improve the number of contracts you are offered.
Organizing your RFPs into a library for easy access and offering integrated communication for all involved are just a couple of the RFP functions available with CM Fusion.
So what does RFP stand for in construction?
The meaning of RFP in construction is pretty simple; RFP stands for Request for Proposal.
When a client has a project that they are getting ready to hire a contractor for, they create an RFP that they then send out to interested contractors (and contractors that they are interested in).
Contractors receive the RFP and then work with their team to evaluate it to see if it is something that their team has the…
… to complete.
If they like what they see and want a chance at the project, they draw up and send in a bid.
If they are not able to take on the project for some reason, they opt for a no-bid and should send in a formal letter sharing why they will not be bidding on the project.
The client receives all of the bids and decides which one they think is their best option.
Once the client selects the winning bid, the project can begin.
There are three main components to an RFP.
These pieces of information allow you to understand the scope of the project and what the client is looking for.
Understanding these three components is key to gaining a good understanding of the project as a whole.
One major component of a good RFP is the basic information about the project.
From timelines to budget, knowing the details helps you decide what your team has the capacity for.
This section ought to include:
What the project is
When it needs to begin
When it should be finished
What roadblocks may stand in the way
A good RFP should also outline the type of contract that the client wants to enter into.
Is this a fixed-rate contract?
Is it labor and materials?
This section should outline what contract(st) the client is open to utilizing so that everyone is on the same page from the get-go.
Here is where the information on how to respond to the RFP is found.
The response might need to be:
A certain number of pages
A certain file type (yes, the type of file you send in really does matter!)
Submitted by a certain date
Information such as previous projects or a team’s qualifications might be needed.
Remember, the company that sent the RFP optimized its requirements to make it as easy as possible for them to filter through their options.
Following the submittal requirements is very important.
That depends on what end of the project you are on.
If you are sending out the RFP and looking for a contractor to help you reach your goal, you should send an RFP once you have decided on the project and have all of the pertinent information to share.
If you are on the receiving end of the RFP process, your job begins once you are sent an RFP. Once you receive it, you and your team should evaluate it and decide if you want to bid or not.
No matter what side you are on, CM Fusion’s cloud-based construction management software can help streamline the process.
An RFP needs to include some important components such as information about the project and budget.
It should also be organized and to the point.
To write a great RFP, you need a good knowledge of the project’s end goal and you need to write from that perspective.
There are regulations that dictate what an RFP must include and it is important to follow these.
Writing an RFP can sound intimidating. There are many different parts and the quality of the RFP can be a determining factor in the overall quality of the project.
But, with the right information and tools, creating a high-quality RFP is much easier than it sounds.
Keep reading to find out what you should — and should not — include.
A good RFP in construction should include the following:
A project overview
In this section, you want to make sure the reader knows what you are wanting to create, what the facility will be used for, and more. Think of it as a hyper-realistic vision-casting.
Information about your company
What do you do? What makes you someone your dream contractor wants to work with?
The scope and goals of the project
This information should be provided right upfront so that no one is caught by surprise or disappointed unnecessarily. How big will the project be? What is the end goal? This section allows everyone to make sure they are on the same page before diving in.
The RFP should include some information about possible roadblocks or difficulties that you can see the project facing.
This creates open communication and allows those to whom you send the RFP to evaluate the project realistically and decide if their team can do what you want for the price you are willing to pay. You might be tempted to fluff up the numbers here or to over-shoot your budget. Don’t do this. You want everyone on the same page and honest communication is the key to a good working relationship.
What you are looking for
Do you want a specific area of specialty? Do you need to stay on budget or can you flex a little? This section should be what matters most to you, whether that be a fluid timeline or something else. You are the one doing the hiring.
Unmet expectations are often unvoiced expectations.
Each side has expectations and the RFP is tasked with clearly presenting those of the writer.
Be clear and concise.
Include your expectations with confidence.
This goes for both sides of the RFP.
If you are the one sending it out, be sure to include accurate estimations and be clear about the qualifications you want bidders to have.
If you are receiving the RFP, make sure you give honest estimations of what you think the project will cost and how long it will take.
Share your qualifications clearly. Even if they decide that you don’t meet the needs they have, it is better for that to be decided before the project begins instead of halfway through.
If you are the one sending the RFP off, be sure to clearly communicate your timing and when you need to get things done.
If you are receiving the RFP, make sure you clearly state when you could have the proposed project finished and what the timeline might look like, even if it doesn’t fully align with the one given in the RFP.
Honesty builds trust and trust creates a fantastic atmosphere for both parties to work together to finish the project.
At the end of the day, flexibility is key.
Your desired contractor might need more time to complete the project than you allowed for in the RFP you sent.
You might have to add to your budget a little bit.
There is always some give-and-take and staying flexible can keep the stress and tension at bay.
As much as there are things you should do with RFPs, there are some major don’ts as well.
Writing and receiving RFPs is not an exact science but there are still some things that stay the same across the board.
One thing to never do when writing or receiving an RFP is make an assumption about the project or the other party.
A well-written RFP won’t leave much room for assumptions but there is always some space for them to slip in.
If the RFP says something clearly, don’t assume that the writer actually meant something different.
When going over a bid, don’t assume they mean something they didn’t clearly state.
Ask for clarification where needed and resist the urge to assume the needs of the other party.
Quality takes time.
You might need something quickly, but if it cannot be done well in that time, a contractor worth their salt won’t stick to your timeline.
Plan your projects far enough in advance that you can begin the RFP process without putting unneeded strain on those you are requesting the proposal from.
If you are receiving the RFP, make sure you are clear about the time it will take you to reach milestones on the project.
It might be tempting to cut the time a little bit to get the bid but this will lead to problems down the road.
Whether you are sending out the RFP or sending in a proposal, be sure you communicate all important information upfront.
No one likes to get knee-deep into something and then find out that they were not given all of the pertinent information from the start.
Save everyone the hassle by maintaining honest communication and sharing all of the information at the beginning.
When responding to an RFP, you have two choices: bid or submit a no-bid.
So, you have received an RFP and, after analyzing it — completely and carefully — with your team, you find that the project fits within your team’s ability and capacity.
How do you relay this to the requestor?
Create thorough, realistic estimations: Make sure you factor in all of the costs associated with completing the project and that you do so accurately. You don’t want to underestimate and end up bankrupt. At the same time keep in mind that it is not unheard of for construction companies to complete a project that results in little to no profit if they know that it will open doors to future projects. Weigh the project and decide what it will take and then accurately share that information.
Set the expectations clearly: Once you determine that your team can take on the project, make sure you are clear and concise about your expectations.
Take the request seriously: Even if you have worked with the same company many times, be sure to be professional in your response. There are regulations in place that must be followed and exhibiting professionalism is a great way to build respect for your brand.
Sometimes you will get an RFP that your team is not able to send a bid for.
If you find yourself needing to turn down an RFP, create a formal letter sharing that you cannot bid on this RFP.
Keep it professional and offer a reasonable explanation. You should send this in before the bid deadline so that the client isn’t expecting something from you.
If working through the RFP process sounds extensive and overwhelming, that is because it often is.
If you don’t have a system that effectively helps you analyze and select what RFPs you want to bid on, the task might be one you dread.
Never fear — CM Fusion is here to alleviate the stress and difficulty that RFPs often bring.
With our cloud-based construction management software, you can organize your RFPs and make sure you are responding on time.
Our software makes creating RFPs a breeze by providing templates and helping you easily send and receive estimates.
RFPs don’t have to be the bane of your existence; they can become an exciting part of your job, thanks to CM Fusion.
If you are trying to figure out where to look now, our company CM Fusion offers a free version of Construction Project Management Software. Not to mention, our customers brag about it’s ease of use, so you should be able to sign up and start managing your projects in minutes.