March 16, 2022
Author: Lorman Education
Request for information (RFI), request for proposal (RFP), and request for quotation (RFQ) are documents forwarded by purchasers to suppliers, which help the purchasers choose the supplier before sourcing a project. An RFI helps to collect information about the willingness and capabilities of potential suppliers to service your project. An RFP contains detailed information that helps you obtain a definite proposal. An RFQ is used to invite detailed bids from shortlisted suppliers.
Request for Information – RFI
Request for information, or RFI, is a method of collecting information from a number of suppliers about their capabilities. This helps in deciding which supplier will be most suitable. It is used when not much is known about the potential suppliers, and helps narrow down a long list. Using RFI as an initial step in a business process offers various benefits to the purchasing company. Apart from showing that the company plans to use a competitive method to source the service or product, RFI also indicates the company’s intention to act fairly by including all companies who may wish to participate. You can gather detailed information about the capabilities of potential suppliers using RFI, and use the information to decide on next steps. Make sure you include the following things in a RFI document:
- Table of Contents
- Introduction, purpose of RFI
- Scope and explanation
- Terminology and abbreviations
- A template that needs to be completed
- Information on next steps – whether RFP or RFQ
Request for Proposal – RFP
Request for proposal (RFP) is an invitation for proposals of services or products, from various suppliers. You generally send an RFP to the list of suppliers that have been narrowed down using an RFI. An RFP can help you compare the development skills and creativity levels of various suppliers, and helps to choose the supplier with the most appealing proposal. Using an RFP can be beneficial because it helps you inform suppliers that they are in the running for sourcing products or services, along with the clarity that they are not the only suppliers to whom you are presenting requirements. An RFP also helps you obtain a formal reply in written format, which could hold up legally and be shared officially in the organization. It also declares an absence of bias towards, or against any particular supplier. Make sure you include the following elements in an RFP:
- Basic information like RFP number, proposal submission date, contact number, company background information, etc
- Project scope and objective
- Duration of project including dates of pre-proposal meeting, decision making, production start date, delivery date, etc
- Requirements and Design
- Commercial requirements
- Budget
- Criteria of evaluation of RFPs
Request for Quotation - RFQ
Request for quotation or RFQ is a document, which purchasers use to invite bids on a project from suppliers. An RFQ is useful in scenarios when products need to be repeatedly procured in same quantities, or when products are standard. Sometimes RFQ is followed by another RFQ to one or two suppliers who have been shortlisted. An RFQ should include the following elements:
- Persons to contact in case of queries
- Parts with numbers and description
- Quantities to buy
- Specifications, drawings, etc
- Quality requirements
- Delivery terms and address
- Terms of payment, contract, purchase agreement terms, etc
- Quotation deadlines
- Quote binding period
- Price transparency level
A request for information, or request for proposal can precede a request for quotation. An RFQ contains all the information that is needed by suppliers to offer their quote. It also lets them know that the bid is competitive and multiple suppliers have been invited.
For More Information
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