RFQ: pros & cons , use


Pros and cons

An RFQ is not publicly broadcast, it is circulated among only a few selected vendors capable of delivering the product the issuing company desires. Thus, using an RFQ reduces procurement processing time because there is no need to prepare procurement solicitation documents. As the number of bidders' quotes requested limits the amount of RFQs received, it can have a direct impact on reducing the selection process time. Also, as an RFQ goes to a limited number of pre-qualified vendor, the quality of the final product can also be kept in check.
                Although, the RFQ may result in deviations from the normal process because the soliciting company determines which vendors to send RFQs to, in effect limiting the competition. Vendors that favorably respond to the RFQ and meet the minimum criteria are included in the RFP solicitation process.

When to Use an RFQ

Using an RFQ makes the solicitation process more efficient because the document is circulated only to a select few. With even fewer qualified responses being provided. This reduces the time and effort required to evaluate proposals from qualified bidders. This can be modified to the particular terms and conditions. The contract is awarded when a vendor accepts the offer.

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What is an RFQ?

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A request for quote or RFQ is a type of procurement request sent out by a company asking other outside vendors to offer a quote for the completion of a specific task or project which the company wants to outsource. An RFQ is similar to a request for proposal (RFP) and provides comprehensive information to the bidder concerning the project's requirements. An RFQ frequently requires the bidder to itemize costs for each phase of the project to allow the soliciting company to compare several bids. While an RFP is sent to vendors after approving their quotations. The detailed process From the above, we can definitely see that an RFQ is usually the initial step for submitting an RFP, in which the bidders are asked to offer a more comprehensive price quote with additional costing details. However, RFQs may be submitted as an attachment to an RFP. An RFQ is typically used when products and services are standard or off-the-shelf, which allows the issuing company to compare the v...
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