Types of Business Proposals

At some point in your career, you may receive a formal request for your company to provide a proposal. There are two types of formal, solicited proposals: IFB and RFP (also known as RFQ).

An IFB (information for bid) is used for standard products. For example, an organization wants to purchase 1,000 units of equipment of a specific brand, type or model. The supplier with the lowest bid typically gets the order.

An RFP (request for proposal) or RFQ (request for quote) is issued when a customized product or service is needed. In some cases, the company requesting the proposal knows exactly what components should make up the product or service and will provide potential suppliers with these technical details. The supplier that can most closely meet the specifications at the best price will receive the job. Other times, the RFP is a statement of goals, and the customer is asking companies to design and recommend a solution to meet those goals. Typically, the most persuasive proposal wins the contract.

From: Markel, Mike. Technical Communication. 6th ed. Boston: Bedford/St. Martin's, 2001.