Hello, Guest!
IFB vs. RFP: How They Help in Government Contracting text over an image of two people discussing the terms and conditions of a contract

IFB vs. RFP: How They Help in Government Contracting

Government contractors can submit proposals to federal agencies and compete for contracts in two ways: an invitation for bid (IFB) or a request for proposal (RFP). 

Both require sending proposals to government agencies to bid for a project, but they fundamentally differ in their situations of use, solicitation process and many more.

If you’re navigating the GovCon landscape and want to know more about IFBs and RFPs, this article is for you.

 

What are IFBs and RFPs?

IFB vs. RFP; What are IFBs and RFPs?
Top photo by fizkes/ Shutterstock | Bottom photo by Pheelings media/ Shutterstock

 

First, let’s define IFBs and RFPs. 

An IFB, sometimes called an invitation to bid, is a solicitation method in which government agencies invite contractors to submit proposals to supply specific goods and services at the lowest possible price.

On the other hand, an RFP is a document used by agencies to announce and solicit goods and services from contractors.

 

IFB vs. RFP: What are Their Key Differences?

IFBs and RFPs may be similar in terms of submitting proposals, but they fundamentally differ in purpose, provisions and other factors.

Below are the key differences between an IFB and an RFP. 

 

Pricing

Government agencies often call for IFBs when announcing a project with clear-cut prices that cannot be negotiated. IFBs are usually used in fixed-price or firm-fixed-price contracts.

Meanwhile, pricing for RFPs tends to be flexible since it depends on the complexity and quality of the project. Negotiations may happen even after the initial proposal has been submitted, giving the contractors the opportunity to adjust their bids accordingly.

 

Specifications

While the prime goal of an IFB is to procure goods and services at the lowest possible price, interested contractors still need to refine their proposals to cover all labor, material and operating costs.

A great example of a detailed IFB was the North Atlantic Treaty Organization’s (NATO) solicitation for bids to buy new off-the-shelf software with command and control capabilities. It emphasized that interested contractors must apply to the Department of Commerce for a declaration of eligibility and a clearance to work with NATO and must have an active facility within the United States.

On the other hand, RFPs are centered on specialized services or commodities. Some agencies may request products that are yet to exist, which is why some RFPs include research and development as part of their potential task orders.

 

Invitation Process

One advantage of IFBs’ sealed bid solicitations is the leveled playing field for small and big contractors as agencies choose proposals based solely on price.

Meanwhile, since RFPs hinge on the quality and innovation value that contractors can offer, they need to be more comprehensive. Contractors are pushed to be more creative in their solutions to boost their chances of winning contracts.

 

Situations of Use

As IFBs have fixed prices for soliciting commodities, state and federal agencies implement them to achieve higher transparency standards and avoid favoritism and corruption. They also enable small businesses to compete for contracts or become subcontractors for larger government contractors.

In contrast, RFPs are more suitable for projects that require tailored solutions for complex problems. Agencies usually use them when in need of consulting services with thorough evaluation and review processes.

For example, the state, local and education markets often use RFPs to provide localized benefits to civilians with the best bids possible.

To achieve transparency in procuring goods through RFPs, agencies are held accountable by law for executing project goals and contractor choices and for using taxpayers’ money wisely.

 

Evaluations of Submissions

Evaluating IFBs is quick and straightforward since government agencies assess proposals based on the lowest prices possible.

On the other hand, RFPs can take longer to evaluate since they are more comprehensive. Government agencies need to meticulously assess proposals based on the prices, quality of services, operational plans and vendor experience and credibility.

 

Contract Awarding

Just like the evaluation process, awarding a contract won through an IFB is quicker and more straightforward. That said, minimal negotiations on the clarity and scope may still take place before the contract is officially awarded to the bidder.

In the case of RFPs, the awarding process may also take longer as the vendor may still negotiate the contract’s terms and conditions before it is finalized. The contract only becomes official once an agreement has been made.

Below is a table summarizing IFB vs. RFP.

 

Invitation for Bid Request for Proposal
  • Bases solely on the lowest price/bidder
  • Pricing is fixed and cannot be changed
  • Sealed bid proposals that make all data public to other bidders
  • Evaluation and awarding stages are quick and straightforward
  • Focuses on quality and innovation of services
  • Allows more flexibility for the prices of services 
  • Only names of bidders are public; pricing and other data are kept confidential
  • Evaluation and awarding may take longer due to its complexities

 

IFB vs. RFP: Key Takeaways

Person signing a contract beside a blurred image of the facade of a court
Photo by create jobs 51/ Shutterstock

 

  • IFBs and RFPs are vital to achieving mission success.
  • IFBs are suitable for projects with defined pricing and requirements, while RFPs are more appropriate for complex projects that require tailored solutions.
  • IFBs level the playing field for all contractors, especially small businesses looking to expand their contracting credibilities. RFPs focus on a vendor’s expertise and to get the best value commodities.
  • Both solicitation methods aim for transparency, holding the parties involved accountable for using taxpayer money accordingly.

 

You might also want to read: GSA Contracting 101: Everything Government Contractors Should Know

Video of the Day