How do I conduct a competitive RFP / RFQ?

Following are some key points to ponder when running a competitive RFP (request for proposal) or RFQ (request for quote) - such as when you are evaluating companies to serve as your product design partner, or your contract manufacturer, or indeed any business partner who will play a significant role in helping you get your product to market. 

• If you are looking for someone or something new, ALWAYS comparison shop. It takes twice as long.  But you will think through the selection criteria much more clearly, have a much deeper understanding of each candidate’s strengths and weaknesses, have much better leverage on price, and will almost always save money in the long run.
• Make sure you write a thorough RFP and take special care in assembling the supporting documentation.  A proposal or quote is only as good as the RFP package.  Clearly outline what you are asking someone to quote, break it down into phases, make it very clear how you want the response to be structured, and include an RFP questionnaire to ensure the response covers key areas of interest.
• Where possible, do a budgetary quotation on something you know the price of. For example, if you are looking for someone to develop a new iPhone app, you could have them look at an existing iPhone app and ask them how much it would take for them to create that app.
• Give vendors enough time to put forward a thoughtful response.  A week or two is appropriate for most projects.
• After you receive each response, follow up with a phone call to go over each line item, ask the candidate partner to clarify any ambiguities, and clearly express your issues and concerns.
• Respond to their response in a timely and respectful manner.  They have worked hard to provide you with a quality response, and they deserve to be treated professionally even if you have decided against working with them.