What is an RFQ?

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 various bids easily using a RFQ software. When the issuing company knows the quantity of products that it wants to purchase, it uses an RFQ.

                            For example, a government agency wants to buy 500 computers with a specific hard drive size and processing speed. Now as the product is known, the agency can send the RFQ to selected vendors. And since the product is uniform, the agency can easily compare different quotes.

                                                            An RFQ is usually sent to several potential vendors, asking for bidder pricing. It may contain information that the bid must include for consideration, payment terms, the factors that decide which bid the company chooses and a bid submission deadline. An RFQ focuses mostly on pricing. If the minimum criteria are met, the vendor with the lowest bid is generally wins the contract.