Request for Proposal
Also called: RFP · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT
Meaning
A Request for Proposal (RFP) is a formal document a government or organisation issues to invite firms to send detailed offers for a project. It sets out the work, the eligibility rules and the criteria for judging the offers. The firms' replies are called bids, and they are scored only on the criteria the RFP announced. This matters because an open RFP with clear rules makes public spending more transparent and lets more firms compete.
Example
On 22 October 2021, the Ministry of Heavy Industries issued the Round-1 RFP under the PLI scheme for Advanced Chemistry Cell (ACC) batteries. A PLI (production-linked incentive) scheme pays firms based on what they actually produce. By January 2022, 10 companies had bid for about 130 GWh of capacity. In 2026, a global RFP for 10 GWh of grid-scale battery storage capacity drew 22 bids. Firms then had to wait for a two-stage evaluation that weighed both quality and cost before anyone was selected.
Don't confuse with
- Bid: the RFP is the government's invitation, and a bid is a firm's answer to it. Getting 22 bids does not mean 22 firms win. Selection happens later.
- L1 (lowest bidder) selection: an RFP can use other ways of choosing a winner. Under QCBS (Quality and Cost Based Selection), technical quality counts along with price, so the cheapest bid may not win.