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Blog: RFP vs. IFB: What’s the Difference?

Blog: RFP vs. IFB: What’s the Difference?

There are several different types of solicitations that government agencies can create when they want to procure a product or service. The most common ones are RFPs (Requests for Proposal) and IFBs (Invitation for Bid, also called an ITB –Invitation to Bid). Both RFPs and IFBs require that a vendor submit a bid proposal in order to be considered for a contract; as well, both are subject to regulations that require that the contracting agency publish a public announcement about the bid to ensure that the community at large is aware of the pending contract.

For RFPs and IFBs, 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 agency to determine which method of procurement best suits their needs.

Why Agencies Choose an RFP

Agencies 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 due to the fact that they don’t have generic specifications about the product or service available, or because they require more information from qualified vendors before they can determine how a project should be undertaken.

By issuing a Request for Proposal, the buying agency is asking interested vendors to submit more than just the price they would charge to complete the contract. An RFP requires vendors to offer suggestions or ideas on how the work should be completed - essentially, to provide consulting services in addition to the actual work outlined in the contract. RFP’s prompt vendors to create customized proposals and encourages them to suggest different approaches to the same project; the more solutions a vendor can suggest, the more they will stand out from their competitors. When issuing an RFP, buying agencies are not required to host a public opening of the bid, and the vendor offering the lowest price does not always win the contract. Agencies evaluate proposals based on a combination of factors including price, 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 IFBs. Requests for Proposal also allow vendors and agencies to negotiate terms, with the goal for the agency being that they get the “best and final offer.”

When an IFB is More Appropriate to Use

An agency may choose to issue an Invitation for Bid 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 IFB is issued. In cases like these, agencies find that there is no substantive difference between vendors and that there are many providers who can meet the needs 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 IFB requires a sealed bid process to ensure a level playing field for vendors. This also means that there can’t be any negotiations about price or services required by the contract. Evaluating an IFB is not complex like an RFP, since the only criteria that an agency has to look at is pricing. In the case of a tie between vendor prices, agencies may conduct further evaluations to assess the quality of a vendor’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 vendor will be awarded the contract to meet the needs of the agency.

Buying agencies will consider every available method of procurement for a project to ensure they are receiving the best price and service from vendors. Some agencies 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 them to learn more about the products or services they need and gain an idea of what they should expect when they receive the actual proposals from vendors. Whether you are responding to an RFP or an IFB, knowing the difference between the two can help you prepare a winning proposal.

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