Once it is determined that a project or servicing initiative could be attractive to both the private and the public sector, the local government must undergo a process of determining a suitable partner. In these situations, the local government may wish to consider issuing an RFEI or RFQ. (This topic was introduced in section 6.4 of this guide.)
At this stage the local government can use either an RFEI, an RFQ, or both. The selection of the process will be contingent on the local government's knowledge and understanding of the issue at hand.
• An RFEI is used when the local government has a general idea of what it hopes to achieve through a public private partnership, but does not know how to achieve the end goal. In this case, the local government is looking to the private sector for innovative and cost-saving ideas before drafting the Request for Proposals.
• An RFQ is used when the project goals are well-defined by the local government but there is some uncertainty as to whether there are any private sector partners who may be interested and have the skills to undertake the initiative.
Generally, the main difference between the two processes is that the RFEI can be used as an information-gathering tool prior to drafting an RFP, whereas an RFQ is used to shortlist qualified private sector partners.
Depending on the nature of the project, a combined RFEI and RFQ can be used to achieve both the goals described above.
The RFEI or RFQ process is important for local government because it can serve to screen potential partners. In many situations, it would be extremely time-consuming and costly for local governments to evaluate all proposals received after an RFP. The RFEI or RFQ process allows the local government to narrow the field prior to issuing an RFP to the selected potential partners. These processes may also allow the local government to prepare more insightful RFP documents that will be beneficial to both the potential partners and to the achievement of the local government's goals.
The screening process is also a courtesy to the private sector. If three bidders are chosen and issued an RFP, the selected private sector bidders are much more likely to invest time, resources and innovation into preparing a proposal than if ten proponents are selected. A select few bidders at the RFP stage gives those preparing proposals a reasonable chance of being selected. The RFQ process is much shorter than preparing a full RFP and can save considerable financial and time expenditure by unqualified private sector respondents.