Understanding Construction RFPs
A key step for winning larger contracts for any construction business is to enter the world of RFPs. If you’re new to the space, however, it may be overwhelming and confusing. In today’s post, we’ll dive into construction RFPs and how you can navigate the process.
What is an RFP in Construction?
Let’s start with a definition: RFP stands for Request for Proposal. RFPs are released by organizations, both public and private, when the estimated cost of the project exceeds a certain threshold (often $100,000 but sometimes higher or lower) or if it is a particularly complex project. Organizations use RFPs to learn more about potential vendors and determine the one best suited for their project or contract.
Overview of the Bidding Process
Construction projects typically follow a similar bidding process. First, the buyer will release an RFQ (Request for Qualifications) to narrow the list of vendors to those most qualified to do the work. Once the list is narrowed, an official RFP will be provided to that smaller pool of candidates. Many times a presentation will follow the proposal submission, and then contract negotiations may occur depending on the project. Once everything is agreed upon and approved, the project officially starts.
Sometimes organizations will release an RFI (Request for Information) instead of an RFQ. These are similar documents focused on learning more about your organization’s capabilities and qualifications to do the work. Pay attention to see if passing the first round is required in order to respond to the RFP. If so, then you will have to submit a response to be considered for the RFP.
For smaller construction projects, you may be asked to submit a Bid (in response to a Request for Bid, RFB). This typically is strictly pricing and oftentimes you have to be on a prequalified list to submit a bid, especially in the public sector. Review your local agency’s website to learn more about what you need to do in order to win contracts.
RFPs vs RFQs in Construction
Your approach to RFPs and RFQs will differ.
RFQs are often the first round to be able to respond to the RFP. In order to make it to that round, your response to the RFQ should highlight your company’s unique strengths and capabilities. Choose projects that showcase your past work in the space that you are bidding. Your goal here is to show that your organization is more qualified (or at the very least, equally qualified) than the competition.
Once you make it to the RFP phase, your proposal will focus more on your specific approach to the project. Here you will highlight any unique facets of your implementation, your team (though they will likely be mentioned in the RFQ too), and why your approach is more likely to result in a project completed on time and within budget. If you know who else is responding, you can identify their selling points and counter them with yours. RFPs also have a stronger pricing component than RFQs (which often don’t include pricing), which means a sound pricing strategy is necessary to win.
How to Respond to Construction RFPs & RFQs
While your approach to RFPs and RFQs will differ, there are a few ways you can improve your responses at each stage.
Always answer “Why does it matter?”. When you include a point within your proposal, back up that point with the “why”. Many of the evaluators will likely not have a background in construction, and you’ll need to clearly explain why any key points are important.
Make content easy-to-read. It’s tempting to throw together the minimum requirements and send out your document. If it’s hard to navigate your proposal, however, you aren’t going to win many points. Instead, focus on formatting your document so the evaluators can skim the proposal and understand your main points without having to read all of your text.
Highlight Unique Differentiators. Your approach is likely slightly different than your competition. Show the evaluators why your way is better or why your team is more qualified. Make this very clear without directly calling out any competitors.
Download the *FREE* Technical Proposal Writing Playbook to improve your proposals today!
Next Steps
Now that you know more about construction RFPs, it’s time to start responding! Read the related posts below for more tips or contact us for help with your RFP response.