Log In or Sign Up

The RFP Is a Growth Engine: How to Use AI Where It Actually Matters

Stargazy Blog Background

Published on October 27, 2025

For many companies, Requests for Proposal (RFPs) are still treated as administrative paperwork. That’s a strategic mistake. Governments and enterprises direct trillions of dollars through tendered contracts every year, yet most sales organizations lack a disciplined, data-driven approach to competing for them.

The true opportunity lies in how teams use AI not to write faster, but to connect context, like customer insight, capture data, and post-bid learning, into a repeatable system.

1. The scale and the blind spot

Every year, governments around the world spend about US $13 trillion through public procurement processes, roughly 12.7% of GDP across OECD countries and 30% of total government spending. These are long-term, high-value contracts that can anchor predictable cash flow and shape multi-year revenue forecasts.

Yet many Chief Revenue Officers (CROs) and sales leaders still relegate RFPs to the sidelines, handing them to overextended proposal teams as compliance tasks. That view ignores what the data now makes clear: proposal work is one of the few 'sales support' functions with direct, measurable impact on win rate and lifetime value.

The RFP and proposal software markets, valued at ~US $2.3 billion today and expected to grow at 12–16% CAGR over the next decade, reflect rising investment in this overlooked revenue channel.

2. Where bid processes actually break

Henry Brogan, CEO of BidScript, observes the same failure pattern across industries:

  • Capture rot. Sales and BD teams hoard critical pre-sales intelligence, including stakeholder notes, pain points, buying triggers, etc., that never reach the proposal team.

  • Late engagement. Bid specialists are looped in after deadlines compress, reducing time for strategy and quality.

  • Cultural misalignment. Leadership still views RFPs as paperwork rather than pipeline assets. This usually means teams don't have the alignment incentives, support, or funding required to win at scale.

The result is predictable, too. Average RFP win rates hover around 45%, and the same avoidable mistakes repeat across submissions.

“If a CRO dismisses RFPs as admin, that’s not a process problem, it’s a leadership one,” Brogan says.

3. The three places AI makes an actual ROI difference

AI’s impact in proposal management is real but misapplied. The biggest gains aren’t from writing faster, not really. They come from three higher-leverage areas:

1) Pre-bid intelligence

AI can unify internal and external intelligence before drafting begins. Retrieval systems can pull:

  • Historic client interactions from CRMs.

  • Prior proposal data and win themes.

  • Public sources such as board minutes or annual reports to extract current buyer goals.

This context builds a more targeted strategy before a single answer is written.

2) Context-aware drafting

The most effective AI systems use Retrieval-Augmented Generation (RAG), a method that generates text only from approved data and prior submissions. When properly implemented, RAG ensures proposals reflect verified knowledge, not generic filler. Humans then elevate voice, alignment, and persuasion.

3) Post-bid learning

The highest-performing proposal teams institutionalize feedback. AI can now:

  • Aggregate evaluator comments, scores, and task timelines.

  • Identify correlations between review behavior and final scores.

  • Flag outdated or contradictory content in libraries.

Over time, this builds a compounding advantage so each proposal improves the next.

4. What buyers are changing

Buyers themselves are modernizing how they issue and evaluate RFPs.

  • AI disclosure clauses. Many now ask suppliers to declare if AI was used in drafting. There’s no penalty for transparency, but there is for poor quality or hallucinations / inaccuracies.

  • Prescriptive question formats. Requests increasingly require comparative analysis (“describe how this process improved over time”), which tests reasoning across context, not regurgitation.

  • Format diversification. Some procurement teams are experimenting with video or microsite submissions. Expect continued evolution as procurement tech matures because this is already a popular move in the B2B enterprise space.

5. Due diligence for tech buyers

When evaluating proposal software, don’t stop at “Which LLM do you use?” Instead, ask:

  • Data architecture. Is it relational, vector, or hybrid? How does it link clients, content, and outcomes?

  • Context window. How much material can the system interpret per response?

  • Governance. What audit trails, permissions, and privacy controls are in place?

  • Scalability. Can the infrastructure evolve with future AI models without re-platforming?

Legacy systems built on older code often can’t adapt quickly. Vendors designed on modern data structures will outpace them, but ask the right questions to quickly get out of talking to poorly designed proposal tech tools.

6. Culture beats tooling

AI can’t fix organizational indifference. The most advanced tools will still fail in companies that treat proposals as admin work.

High-performing teams share three traits:

  1. Early engagement. Proposal pros are looped in before qualification, not after.

  2. Accountability. Sales and bid teams share a single source of truth for capture data.

  3. Continuous learning. Post-mortems are mandatory and data-driven.

If those conditions don’t exist, technology will only automate the losses.

Executive checklist

To treat RFPs as a growth system:

  • Assign a leader with authority across sales, proposal, and delivery.

  • Run structured pre-bid briefs capturing stakeholder pain, value, and risk.

  • Integrate CRM, proposal management, and knowledge systems.

  • Use AI for retrieval, not replacement; humans still craft winning narratives that don't get you sued.

  • Publish quarterly win-loss reviews tied to concrete actions.

  • Resource proposal teams as a revenue function, not a cost center.

Bottom line

RFPs are not red tape, but instead, they’re revenue engines hiding in plain sight. AI’s real value lies in how it helps teams connect insight, process, and learning into one loop. The organizations that master this connection will not only win more bids, they’ll understand why they win and exploit that to win against you.

Sources

  1. Open Contracting Partnership (2020), How Governments Spend: Opening Up the Value of Global Public Procurement

  2. OECD (2025), Government at a Glance 2025 – Size of Public Procurement

  3. Verified Market Research (2024), Request for Proposal (RFP) Software Market Report

  4. Fortune Business Insights (2024), Proposal Management Software Market Report

  5. Fortune Business Insights (2024), Procurement Software Market Report

  6. Verified Market Reports (2024), Tender Management Software Market Report

  7. Loopio (2024), RFP Response Benchmarks and Win Rate Report

Stargazy Links

✸ Join the community ✸ Subscribe to The Stargazy Brief ✸ Explore proposal tech comparisons ✸ Follow Stargazy on LinkedIn