A request for a quote (RFQ) is a business process in which a business solicits quotes from select suppliers and contractors for a specific task or project. … A business generally sends an RFQ when the quantity for a standard product is known and needs are ongoing.
Most business people are familiar with the abbreviations RFP and RFQ but what is the difference, and how are they used?
The choice of which type of document to use depends on the product or service required and the desired outcome – is it a proposal or a detailed price bid that is needed?
A Request for Proposal (RFP) is a formal method of receiving detailed and comparable proposals from different suppliers for a specified product or service. It is a comprehensive document that should provide all the required information needed to make an informed purchasing decision for strategic purchases. An RFP process may take anything from a few weeks to six months.
A Request of Quotation (RFQ) is a competitive bid document used when inviting suppliers or contractors to submit a price bid products or services where the requirements are standardized or produced in repetitive quantities. An RFQ is often used for high-volume/low-value items and should be completed more quickly than an RFP. The buyer must provide a technical specification as well as his commercial requirements. The document may sometimes be referred to as an Invitation to Bid or Invitation to Tender.