Answer:
Request for Proposals(RFPs)
a) Reasons for government agencies and other firms to use request for proposal:
1. The proposal involves a complex project.
2. The project requires detailed technical information.
3. Hard data is required for analysis and comparison.
4. There is need for objective comparison of vendors' responses.
5. To outline a project's requirements to suppliers so that they can provide detailed solutions.
6. To establish joint understanding of the requirements with the suppliers.
7. To form the project's baseline and point for contract negotiation.
b) An example of a project that might require an RFP is a project to construct a stadium on an Island. In such a case, the prospects of the project have to be explored at the formation stage, with the costs and effectiveness of the solutions to be provided by various suppliers carefully studied for possible integration. A project may be cancelled after the submission of an RFP because it is understood that the project may not be feasible in terms of economy, efficiency, and effectiveness.
Explanation:
RFP is different from a request for quotation (RFQ). For RFQ, the need or problem is specific with specific solution, and there is no need for detailed technical information. An RFP requires a general problem that requires possible solutions to be offered. The acceptance of RFP or RFQ establishes the contract between the firm or governmental agency and the supplier.