A typical contract proposal will include several important types of information.
Contract proposals are documents prepared by a vendor or supplier in hopes of securing business for a specific client. In many cases, these proposals are prepared in response to an inquiry from a potential client. The ultimate goal of any proposed contract is to establish a contractual relationship between the supplier and the customer that lasts for an extended period of time.
Sometimes businesses of all sizes use their purchasing power to secure special rates from different vendors or providers. While large corporations routinely use this approach, smaller companies sometimes join cooperatives or consortiums to pool their buying power and get better rates. In either scenario, it is not uncommon for the company to issue what is known as an RFP, or Request for Proposal, to a selected number of potential vendors. The vendor that responds with a contract proposal that provides the most overall benefit to the customer will generally protect the business and hopefully establish a long-term relationship between the two.
A typical contract proposal will include several important types of information. First, the document will provide the prices, based on the needs of the client. It is not uncommon for the price to be lower than the standard published price provided to customers who do not have the same level of purchasing power. Many vendors and sellers also include what is known as a tier price, which is simply a price list that gives the customer additional discounts if their product’s consumption in a certain period of time exceeds a certain amount.
A proper contract proposal will also detail the range of support that the vendor will provide to the customer. This may include items such as order processing procedures, guarantees about timely delivery of goods or services, and procedures for processing returns. Along with pricing, addressing the scope of services can often make a big difference in whether or not you are successful in trying to secure business.
The duration of the contract proposal is also important. Identifying a specific start and end date allows the customer to understand how long the commitment will be in effect. Including situations that may allow each party to void the contract also helps protect the rights and responsibilities of the seller and supplier. Many contract proposal formats also include clauses that allow the contract to be automatically extended if both parties agree to this option.
There is no one right way to prepare a contract proposal. The final format largely depends on determining what is likely to attract the customer and win the business. While using an RFP as a roadmap to prepare the proposal is always the best option, situations where proposal guidance is not provided make it necessary for vendors to investigate the nature and needs of the client in detail. Ideally, the research will allow the provider to design and present a contract proposal that resonates with the client and establishes a long-term relationship that is mutually beneficial.