What is an RFP? 10 benefits & best practices in 2025

Most HR professionals don't wake up excited about creating Request for Proposals. Yet these deceptively simple documents might be the most underrated strategic tool in your benefits toolkit.

Right now, in a time when benefits platforms promise everything from mental health support to pet insurance, the humble RFP stands between you and a potentially costly mistake. It's not just paperwork. It's your roadmap to finding the perfect partner who'll help deliver benefits that actually matter to your increasingly diverse workforce.

This article strips away the confusion surrounding RFPs in the benefits space. We've consulted procurement experts, HR leaders, and benefits specialists to create a straightforward guide that transforms this often dreaded process into a strategic advantage. Here’s everything you need to know about RFPs, their benefits, and best practices.

Key takeaways

• An RFP (Request for Proposal) is a formal process that helps HR teams objectively compare and select the right benefits vendor.
• RFPs promote transparency, competitive pricing, and vendor accountability while reducing bias and procurement risk.
• They improve internal alignment, attract high-quality vendors, and support long-term strategic planning through structured evaluation.
• Best practices include defining clear goals, prioritizing needs, building in flexibility, and planning for post-selection engagement.
• Common pitfalls like over-specification or process complexity can limit innovation and exclude strong contenders.
• Forma supports HR teams through every step of the RFP journey, from compliance to engagement, with flexible, high-impact benefit solutions. <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">Schedule a demo</span today.

What is an RFP?

A Request for Proposal (RFP) is a formal invitation organizations use to collect comprehensive proposals from potential vendors or service providers. When looking for new employee benefits solutions such as health plans, wellness programs, Lifestyle Spending Accounts (LSAs), or benefits administration platforms, a well-crafted RFP becomes essential to the selection process.

The most effective RFPs clearly communicate your company's goals, budget parameters, workforce demographics, desired features, and technical needs. They include targeted questions about vendor capabilities, compliance frameworks, security protocols, support resources, and track record of success. This structured approach creates a transparent, apples-to-apples comparison between providers, minimizing subjective bias and supporting decisions grounded in data and strategic objectives.

Creating an RFP allows your company to determine which provider delivers the ideal blend of value, adaptability, growth potential, and user experience. The process extends beyond simple cost analysis to evaluate lasting compatibility, innovative capacity, and operational alignment. For organizations seeking to refresh and update their benefits offerings, the RFP represents a crucial starting point.

Benefits of RFPs

RFPs have powerful advantages that transform how you find and partner with benefits providers. Here's why smart HR teams make them a cornerstone of their procurement strategy:

1. Ensures competitive pricing

One of the primary advantages of using RFPs is that they help you obtain competitive pricing from multiple vendors. By soliciting bids from a range of suppliers, you can compare offers and identify the most cost-effective flexible benefits that meet your requirements. 

This process encourages vendors to provide their best prices, as they know they are competing against other providers.

2. Facilitates transparent selection

RFPs promote transparency in the vendor selection process by requiring a clear definition of evaluation criteria. This reduces ambiguity and ensures that all potential suppliers are assessed based on the same standards. 

Transparency in the selection process builds trust with vendors and helps justify your final decision to stakeholders.

3. Encourages vendor accountability

The RFP document serves as a comprehensive outline of the expected scope of work and deliverables. This clarity helps hold vendors accountable for meeting the agreed-upon requirements and timelines. 

With a well-defined RFP, you can easily monitor progress and ensure that the selected vendor fulfills their commitments.

4. Promotes thorough documentation

Engaging in the RFP process creates a detailed record of your procurement journey. This documentation includes your requirements, evaluation criteria, vendor proposals, and decision-making rationale. 

Having a comprehensive audit trail is particularly valuable for compliance purposes and future reference.

5. Enhances communication and collaboration

RFPs facilitate effective communication between your organization and potential vendors. The process encourages open dialogue, allowing you to clarify requirements, address concerns, and gather additional information. 

This collaborative approach fosters a deeper understanding of your needs and helps vendors tailor their proposals accordingly.

6. Mitigates risks

RFPs help mitigate various risks associated with procurement. By clearly defining terms, conditions, and regulatory requirements, you can ensure that vendors are aware of their obligations and can plan accordingly. 

This proactive approach minimizes the likelihood of misunderstandings or disputes down the line.

7. Streamlines decision-making

RFPs simplify the decision-making process by providing a structured format for comparing vendor responses. With standardized proposals, stakeholders can more easily evaluate key factors such as pricing, capabilities, timelines, and experience.

This organized approach reduces confusion and speeds up internal approvals, helping your team make confident, data-driven choices.

8. Attracts high-quality vendors

A well-crafted RFP signals professionalism and seriousness, making it more likely to attract top-tier vendors who are selective about the projects they pursue.

Clear guidelines and expectations demonstrate that your organization is organized and values vendor relationships—qualities that appeal to experienced providers.

9. Supports long-term strategic planning

The insights gained during the RFP process often reveal trends, capabilities, and innovations in the market. This information can inform broader strategic decisions beyond the immediate procurement need.

By analyzing vendor proposals, your team may uncover new solutions, technologies, or partnership opportunities that align with your long-term goals.

10. Improves internal alignment

Drafting an RFP requires input from various departments, encouraging cross-functional collaboration and alignment. This process helps surface differing priorities and ensures that all internal stakeholders are on the same page regarding project goals, budget, and expectations.

Ultimately, this alignment leads to more effective implementation and smoother vendor relationships.

RFP process in 5 steps

Turning your RFP from concept to reality requires a methodical approach that maximizes your chances of finding the perfect partner. Here’s a roadmap to guide your team through the entire selection journey:

1. Discovery and planning

Before creating your RFP document, you should invest time collecting valuable perspectives from essential stakeholders about project scope, available budget, and strategic objectives. This crucial groundwork forms the backbone of your RFP and lets you articulate your needs clearly to prospective vendors.

Your team should connect with technical specialists, the employees who will actually use the solution, and key decision makers to develop a complete picture of what success looks like and what limitations exist. The documentation of these insights helps maintain alignment across your organization and prevents the gradual expansion of requirements that can derail even the most promising vendor relationships.

2. Drafting the RFP

With the project requirements in hand, start drafting the RFP document. Include a project overview that summarizes the key objectives and provides context for vendors. Clearly define the scope of work, outlining the specific tasks, deliverables, and timelines expected from the selected vendor.

Specify your budget range and any constraints to help vendors propose solutions that align with your financial resources. Include a detailed timeline for the RFP process, including deadlines for proposal submission, evaluation, and final selection.

Provide clear submission guidelines, specifying the format, length, and content requirements for vendor proposals. This will ensure that you receive consistent and easily comparable responses.

Before drafting the RFP, take a look at Forma’s RFP toolkit that includes various resources, evaluation criteria, and important considerations you should make before drafting your document. 

3. Issuing the RFP

After your RFP document reaches its final form, the distribution phase begins with identifying qualified vendors who possess the necessary expertise and relevant experience for your project. Your team should consider tapping into industry networks, professional referrals, or specialized online platforms to discover potential partners you might have overlooked.

The communication of your RFP opportunity should happen through appropriate channels such as email, vendor portals, or industry forums, with detailed instructions that explain how vendors can access the complete RFP package and submit their proposals. Your organization should anticipate questions from interested vendors and remain ready to provide timely clarifications that keep the process moving forward.

4. Evaluating proposals

As vendor proposals start coming in, establish an evaluation team to assess them based on predefined criteria. These criteria should align with your project requirements and may include factors such as technical expertise, past performance, proposed solution, and cost.

Develop a scoring matrix to objectively evaluate each proposal, assigning weights to different criteria based on their importance. Review proposals thoroughly, considering both the written responses and any additional materials provided by vendors.

Shortlist the top contenders and invite them for presentations or demonstrations to gain a deeper understanding of their capabilities and approach. Use this opportunity to ask clarifying questions and assess the vendors' fit with your organization's culture and values.

5. Selecting a vendor and finalizing the contract

After your comprehensive evaluation concludes, your selection should focus on the vendor that aligns most closely with your requirements while delivering optimal value for your investment. Your team should promptly notify the chosen partner and initiate contract negotiations to solidify all aspects of your future working relationship.

The contract review process should be meticulous, with verification that all crucial elements appear in the final agreement, including work scope, specific deliverables, project timelines, payment structures, and performance expectations. Legal experts should examine the contract to safeguard your organization's interests and prevent future complications.

RFP best practices & how to measure success 

Looking to get the most out of your RFP documents? Your team should consider these strategic approaches when creating requests and guiding vendors through your selection journey.

Common RFP pitfalls to avoid

Though RFPs deliver significant advantages, they also present several challenges you should recognize and plan for.

• Over-specifying requirements: Over-specifying your requirements can limit vendors’ ability to propose innovative solutions. If your RFP is too detailed and prescriptive, it may discourage creative thinking and result in proposals that lack originality. You should be detailed but also make it known that you’re open for suggestions.
• Incorrect specification: Incorrect specification is another common pitfall. If your RFP contains inaccuracies or fails to include critical requirements, you may end up with a solution that does not fully address your needs. This can lead to costly rework or dissatisfaction with the final deliverables.
• Misprioritizing requirements: Prioritizing your requirements incorrectly can also have negative consequences. If you misjudge the importance of certain features or evaluation criteria, you may select a vendor that does not align with your strategic goals. This can result in a mismatched partnership and suboptimal outcomes.
• Being too rigid: Overly rigid RFPs can lead to a loss of control in the procurement process. If you do not allow room for vendors to provide insights or suggest alternative approaches, you may miss out on valuable expertise and limit your options. You know your business, but third party benefit providers are more knowledgeable about the benefits industry and what employees expect from their companies.
• Making the process too complex: Complex and time-consuming RFP processes can deter capable vendors from participating. If the effort required to respond to your RFP outweighs the potential benefits, some vendors may choose not to engage. This can narrow your pool of options and potentially exclude strong contenders.

Are RFPs worth it?

RFPs deliver exceptional value despite requiring initial planning. The transparency, vendor alignment, and strategic decision-making they enable ensure you select partners based on overall compatibility rather than just price. For employee benefit plans, where compliance and experience matter alongside cost, RFPs provide the structure needed to evaluate vendors thoroughly and choose with confidence.

Forma ranks among the most trusted third-party administrators in the benefits industry, specializing in high-utilization offerings like Lifestyle Spending Accounts, wellness stipends, and professional development funds. 

Our comprehensive platform handles everything from compliance and claims processing to responsive support and global implementation; all from one intuitive system.

We remove administrative burdens, so your team can focus on strategy rather than logistics. Industry leaders like Honda, lululemon, and Tripadvisor trust Forma because we deliver measurable improvements in benefits engagement and compelling ROI. Our customizable solutions create benefits employees actually use and value.

*This document is for informational purposes. Forma is not engaged in the practice of law. Nothing contained herein is intended as tax or legal advice nor to replace tax or legal advice from counsel. If you need tax or legal advice, please consult with counsel or a certified tax professional.

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