RFQ-Request for Quotation:
RFQ is the acronym for Request For Quote or Request For Quotation. An RFQ is a request a company tenders when they have a material or service requirement; the RFQ is basically their way of encouraging Vendors to provide a bid for their requirement. The purpose is to provide a fair evaluation for all bidders and to provide the candidates with the evaluation criteria against which they will be judged. A secondary intention, is to encourage competition amongst the bidders which will help the buyer achieve the best possible bid and cost that suits their existing requirements. The company that issues an RFQ then selects one of the bidders to complete the material or service requirement. In today’s business world it is not always about the price, other factors such as quality and delivery often take precedence over cost. Another angle or use for a RFQ is when a business includes a RFQ form on their website. This allows potential customers to contact them to request prices on services or products. An online RFQ form may help to encourage viewers to make a purchase, as it solicits action instead of passive Internet browsing.
Another term frequently used is Request For Proposal, or RFP. Although the difference in terms can be confusing, an RFP and an RFQ are basically the same: an invitation for a potential supplier or vendor to submit a bid. Although the idea of an RFQ is fairly simple, it is still a business document, and as such is divided into several important sections:
- Section One of the RFQ is basically background information on you or the company issuing the RFQ.
- Section Two of the RFQ is often called “Required Deliverables.” This section describes the material requirement in detail, the scope or the desired end product if it is a service requirement. The RFQ should detail any special requirements the company is wanting.
- Section Three of the RFQ is the Assumptions and Agreements section. This section describes the terms and conditions of the tender, items such as a project budget, a bid limit, safety and regulatory requirements, what types of travel expenses or per diem the company will provide, the process used to approve the product or materials, and so on. By submitting a bid, the contractor is agreeing to abide by the terms and conditions of the tender. An RFQ also provides information for suppliers and vendors to use to submit their bid. This information may include a bid submission deadline, a bid form, bid requirements or information that the bid proposal must include to be considered, and the selection criteria or factors that will determine which bid the company chooses.
There are many free RFQ template examples available online. It is best to attempt to find one that is industry specific which will carry more pertinent terms and conditions relating to your field and to your needs.