There are several different types of solicitations that the Canadian public sector can issue when they want to procure a product or service. The most common ones are RFPs (Requests for Proposal) and ITTs (Invitation to Tender). Both RFPs and ITTs require a supplier to submit a bid proposal in order to be considered for a contract. Both are also subject to regulations that require the departments to publish a public announcement about the solicitation to ensure the community at large is aware.
For RFPs and ITTs, that is where their similarities end! When it comes to deciding which type of solicitation best meets the needs of a particular contract, it is up to the departments to determine which method of procurement best suits their needs.
Why Departments Choose an RFP
Departments choose to issue an RFP when, after considering various criteria, they decide that a sealed bid process would not be practical for a particular contract. This is usually because they can’t provide clear-cut specifications about the product or service available, or because they require more information from qualified suppliers before they can determine how a project should be undertaken.
By issuing a Request for Proposal, the department is asking interested suppliers to submit more than just the price they would charge to complete the contract. An RFP requires suppliers to offer solutions or ideas on how the work should be completed - essentially, to provide consulting services in addition to the actual work outlined in the contract. An RFP prompts suppliers to create customized proposals and encourages them to suggest different approaches to the same project; the more solutions a supplier can suggest, the more they will stand out from their competitors. When issuing an RFP, departments are not required to host a public opening of the tender, and the supplier offering the lowest price does not always win the contract. Departments evaluate proposals based on a combination of factors along with the price proposed, including the effectiveness of the solution, the technology that will be used to do the work and the quality of the product or service provided. These considerations cause RFP evaluations to be more complex and subjective than those for ITTs. Requests for Proposal also allow suppliers and departments to negotiate terms, with the goal for the department being that they get the “best and final offer.”
When an ITT is More Appropriate to Use
A department may choose to issue an Invitation to Tender when they already have the information they need about the specific product or service they require, know exactly what the contract entails and how the work will be completed, and are confident that all requirements of the contract are clearly defined before an ITT is issued. In cases like these, departments find that there is no substantive difference between suppliers and that there are two or more suppliers who can fulfill the requirements of the contract. Therefore, the award would automatically go to the lowest bidder that meets the minimum qualification requirements for the contract.
Unlike an RFP, an ITT requires a sealed bid process to ensure a level playing field for suppliers. This also means that there can’t be any negotiations about price or services required by the contract. Evaluating an ITT is not complex like an RFP, since the only criteria that a department needs to look at is pricing. In the case of a tie between supplier prices, agencies may conduct further evaluations to assess the quality of a supplier’s products and services, their reputation and/or the time frame in which it will take the company to complete the project. Sometimes, more than one supplier will be awarded the contract to meet the needs of the department.
Determining the Type of Solicitation Government Departments Use
Buying departments will consider every available method of procurement for a project to ensure they are receiving the best price and service from suppliers. Some departments may require further information or request a price quote in the form of an RFI or RFQ before they even send out a solicitation. This helps the buyer learn more about the supplier’s qualifications and their products or services, as well as what the buyer should expect when they receive the actual proposals from suppliers. Whether you are responding to an RFP, ITT or any other type of solicitation, knowing the difference between them can really help your business prepare a winning proposal.
To help identify which types of solicitations are available from the Canadian public sector, use the search filters when logged in to your merx account. On the solicitation search page, go to the dropdown filter under solicitation type on the left-hand side menu and choose which types of solicitations you would like to see that are currently open to the public.
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