How our Quotation Forms can Help (5 productivity boosters)

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Creating a procurement form — Quotation form or RFP from scratch is not in every business manager’s top 10 list of items they want to be doing at work each day. For most of us, it is not even in the top 100! Purchasing professionals are results oriented…they want to be reporting to management on $’s saved, contracts awarded, trends and not that they spent their entire day drafting a RFP!  The Request for Quote (RFQ) and other procurement related forms like a Request for Proposal (RFP) are important and do require a strict attention to detail. Is there an easier way to accomplish this task so you can spend your time on more fruitful projects?

At RFQPro.com, we supply sample Procurement Templates for a variety of potential quotation requirements and this is how our quotation forms can help you in your day to day tasks.

Here is a link to the list of some of the forms we offer: https://www.rfqpro.com/pack-breakdown

In this list you will notice we provide both generic and specific types of tender documents which can be used

Most Popular Forms used by Purchasing [3 free samples]

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Most Popular Forms used by Purchasing Professionals today (3 free samples)

In order to manage the need to purchase supplies and services, purchasing professionals turn to certain forms, templates or documents to obtain the internally requested products or services.

Some standard forms you might be familiar with would be: Request for Quotation (RFQ); Request for Proposal (RFP); Request for Inofrmation (RFI); and there are many others.

While most of these procurement forms are relatively straightforward, the RFP is a form that has continued to evolve since its first started to appear in the early ’80’s. Since then, RFP’s have become more prevalent, refined and in some cases are all many companies issue (not what we recommend!!). Regardless, companies that purchase goods and services need procurement forms to help them manage their business. These forms are a necessary evil and ultimately will help you complete the task of getting to the stage for an award.

Work flow and players involved when you issue a RFP / RFQ

Before we detail the templates most used by purchasing professionals today, we think some background on the process would be helpful. Typically, there are 3 or 4 role players in the RFP or RFQ process. There is a Tenderer aka Bidder / Offeror / Supplier / Vendor (A seller of materials and/or supplies who submit a proposal or quotation against your requirements); then there is the Owner which is the parent company issuing the document and paying the bills — the user or internal department making the request or the fellow employees needing the material or service to complete the project — and last the procurement officer who is the person managing the RFP / RFQ. The procurement officer or purchasing agent often generate the documents, issue the RFP, analyze the supplier quotes, makes a recommendation, and finally manages the award to the supplier of choice. There are others like the accounting department which will pay the supplier and so on.

Now back to the most popular forms used today:

RFP – (Request for Proposal). Without question, this form is considered the go to form for procurement professionals, on larger dollar spend and when your selection criteria might use additional factors other than price, like service capabilities or technical support.

Free RFP Template is included in our Welcome Pack

RFQ – (Request for Quote). To some this is up for debate, but depending on the organization, sometimes the Buyer is simply looking for price and delivery on a simple material request.  We need 6 widgets and here is the part # so in this instance a RFP is overkill and is not worth the cost or effort.

Free RFQ Template is included in our Welcome Pack

EOI or RFI – (Expression of Interest) or (Request for Information).  An Expression of Interest (EOI) or (RFI) is used to gauge interest from potential suppliers for a potential upcoming project on the drawing board or hope to officially tender in the near future. An EOI, gives you the opportunity to pre-qualify vendors to ensure they are capable of completing the work under the restrictions or specifications outlined in your document.

Free Simple RFI Template > 8 pages

LOI or LOU – (Letter of Intent) or (Letter of Understanding). Often the next document to be used by the purchasing department if the spend warrants (vs going right to a PO).  It captures the summary terms negotiated by both parties during the award process and these details will eventually make their way into the formal contract. Simply, the Buyer is looking for a document they can use to bridge them over until a formal contract document can be executed.

There are many other documents a Buyer / Purchasing Agent will use in their day to day purchasing needs and if you, like many of us, find the RFP Process overwhelming or too time consuming the RFQPro Step by Step RFP Guide will make these tasks easier and will be released soon. It will simplify the RFP Process by providing a step by step guide c/w with sample forms typically used at each stage when issuing a RFP — a start to finish guide c/w templates. All templates will be provided in edit friendly Microsoft Word format. This comprehensive guide and template pack will be provided at a discount to all our subscribers and with returning customers receiving additional discounts over and above discounts offered to our subscriber base.

Evaluating your Spend

by RFQ - Request for Quotation

Every business should have a clear understanding on their operating costs and should be constantly evaluating this spend regardless of size or how big your company is. What does it mean to be evaluating your spend? If you asked your accounting department to provide a list of the top 20% of vendors in relation to how much money you spend with them annually, this would be a start. This list of suppliers will represent close to 80% of your operating budget. I know, the pareto principle is overused but in this instance is 100% on point.

Prudent business owners will dedicate a large portion of their time or their purchasing department’s time on analyzing this 80% cost. These are your target vendors and where you need to focus your efforts. Requesting price concessions for your guaranteed or long term business and suggesting that they partner with you on productivity improvements are two quick solutions you can key in on.

There are multiple ways to approach this:
1. First drill down and gather specific details on this spend. How many widgets am I buying of a specific product in a 12 month period? This is known as your annual usage. What is our cost to procure these items? Is there a better quality product which will perform the same function and reduce operating costs? Are there like vendors that can provide a similar material or service?

2. Approach your existing vendor directly or by way of a RFQ and request firm pricing for a 12 or 24 month period. In exchange for this commitment, you are expecting preferred pricing. This does two things, stabilizes your costs for the next 12 – 24 months and reduces ordering costs as these commodities can be covered by a contract or supply agreement.

3. Creating competition is the best way to achieve fair market pricing for goods and services. To achieve this, you need to issue a Request for Quotation (RFQ) for the above item(s). If your spend warrants, you should do your homework and pre-qualify vendors for these items. Ensure they are of similar quality by asking for samples and get a sense whether these suppliers can meet price and delivery timelines based on your usage or existing requirements. No use buying something for 10% less than what you are presently paying if the new vendor cannot deliver!

4. It gives the vendor comfort knowing they have your business for the next 12 months in exchange for better pricing. By granting them a contract for the next year, the expectation is the vendor would guarantee they carry relevant inventory in their local branch which would then allow you to reduce on-hand inventory. In this instance you are reducing carrying cost, cash outlay for inventory and achieving a reduction in unit costs. Savings all the way around!

Issuing a RFQ (Request for Quote) to determine present market pricing is always the preferred way of doing business. It is ethical, transparent and begins to condition your suppliers of your intention on monitoring your spend. It sends the message that your company is focused on ensuring you are receiving the best possible product at the best possible price.

If creating a RFQ to help manage costs is on your radar, there are many sample RFQ templates available on-line or the team at RFQPro would love to help you get the ball rolling.

See a list of our templates and forms by visiting our In the Pack Page

Here is to your success — Mark.