What is a Request for Proposal?
A Request for Proposal is a process which contains a well defined document, usually created at the beginning of a call for bids, where an individual or corporation needs to request one or more proposals. This can be done when there's a need to look for suppliers or clients to do a specific task. It usually follows a very precise method and needs to have some specific information so the ones submitting proposals know exactly what to do.
Typically, the RFP contains more than a request for a price. The document explains in details what the contract or business arrangement will be. It also lists what deliverables must be provided. It clearly defines where to submit bids, what's the time limit, and how the selection process will happen. All of this must be clearly written down in a document and published.
For example, when a city needs to hire someone to do some large scale work, they will create a RFP where they will describe the work, specify in details what needs to be done, along with all the details about the bidding process. Then, the Request for Proposal will be posted in a city newsletter or board. The companies interested in doing that work will then be able to submit their bids, and a city committee will decide which bid will be taken.
The RFP is something that's been done for a long time, and can be initiated by any individual or company. It's also usually quite involved. In contrast, a Request for Quotation (RFQ) is used when the only criteria is the bidding price. For example, if it's a very simple task, and the only thing that will determine who gets the contract is the asking price, then a RFQ may be used. There's also cases where a RFQ is used prior to the use of a full RFP, but it could be used by itself.
Another type of request is a Request for Information (RFI) which is a more generic document which asks for information as to which companies are able to do a certain task. There is usually no bidding process involved, and it does not result in a binding proposal. It's often used informally to get an idea of the market. This can be used before a RFQ or RFI, but is rarely seen outside of large processes, such as with big corporations.
Finally, a Request for Qualifications is a process where various parties are asked to submit the name of people or companies which may fulfill a certain need. For example, a test may be given out, to qualify whether or not the potential bidders are able to complete the assignment. This also does not result in bids, and the main purpose instead is to make the following RFP easier, with less potential proposals.