What Is a Request for Quote (RFQ)?

A request for quote (RFQ), also known as an invitation for bid (IFB), is a process in which a company solicits select suppliers and contractors💞 to submit pric♑e quotes and bids for the chance to fulfill certain tasks or projects.

The RFQ process is especially important to businesses that need a consistent supply of a specific number of standard products. Companies may send RFQs alone ജor before a request for proposal 🐬(RFP).

How a Request for Quote (RFQ) Works

An RFQ is usually the first step in submitting a 澳洲幸运5开奖号码历史查询:request for proposal (RFP). Th💙ese two documents are similar, as they provide details of the project or se𓆏rvices required, but RFQs generally ask for a more comprehensive price quote. Also, businesses usually design RFQs for generic products in which the quantity needed is known, and RFPs are for unique, niche projects where quantities and specifications are unknown.

In addition to pricing, RFQs may include details such as payment terms, factors that could influence a company’s bid selection, submission deadline, and the like. A 澳洲幸运5开奖号码历史查询:government agency that wants to buy 500 computers with a specific hard drive size and pro🥃cessing speed, for example, would🅠 send an RFQ to several vendors as prospective bidders.

Because the RFQ format is uniform within a given company, when the RFQs come back with price quotes, the soliciting company may compare them easily. Typically, an RFQ process consists of four sections: the preparation phase, the proces♍sing phase, the awarding phase, and the closing phase. The company generally will award the contract to the vendor that meets the minimum qualifying criteria and presents the lowest bid.

Special Considerations

RFQs are not public announcements. Because the soliciting company sends RFQs only to businesses that it trusts, it does not need to prepare lengthy 澳洲幸运5开奖号码历史查询:procurement documentation. Also, unlike a public solicitation, a company can get bac✅k only the number of ♋bids that it requested, which also saves time.

Using an RFQ reduces the amount o🌌f time needed to procure goods or services. It also offers a degree of security, as a company will receive bids only from vendors it prefers. However, because RFQs reduce the amount of competition, a company may miss receiving the lowest-available price or learning about new high-quality vendors.

When a company receives a quote in response to an RFQ, it is not an offer or a binding contract. The solicitor will offer the job to its chosen vendor by sending it a 澳洲幸运5开奖号码历史查询:purchase order, which is, in effect, a contract specifying the terms and condi😼tions of the work. When a vendor accepts and signs the purchase order, the contract begins.

The Bottom Line

While a request for quote (RFQ) is also♔ known as an invitatio♔n for bid (IFB), there is a slight difference between the two.

An RFQ is typically for projects smaller in size and scope than an IFB. It’s often for clients seeking price information on a defin♔ed scope 𝓀of work or supply of materials or equipment.

An IFB, also known as an invitation to tender, is usually for major projects. The owner knows in detail what it wants and includes detailed performance specifications and qualifications and requirements for bidders.