In the world of business buying, especially in procurement, getting the best deal is just as important as getting the right product. That’s where the RFQ request for quotation comes into play.
An RFQ request for quotation is a standard part of procurement, but not everyone fully understands when and how to use it. We’ll break it down step by step so you can navigate RFQs like a pro, whether you’re a buyer or a seller.
What is an RFQ Request for Procurement?
RFQ is short for Request for Quotation, which is a document or formal request sent by a buyer to one or more suppliers asking them to quote their price for specific goods or services. The buyer has already decided what they need. Now they want to know how much it will cost.
RFQ in procurement is commonly used when:
- The requirement is simple, repetitive, or well-defined
- There’s no need to evaluate the “solution” because the product/service is standard
- Price is the main deciding factor
In short, the buyers know what they want. They just want to know what it’ll cost, from multiple sellers.
What’s in an RFQ Document?
An RFQ request for quotation may vary depending on the industry, but usually includes:
- Buyer’s details (name, organisation, contact info)
- Description of the product/service
- Technical specs (size, material, performance, etc.)
- Quantity
- Delivery location and deadline
- Terms & conditions
- Submission deadline
- Evaluation method
RFQs in procurement are usually 1 to 2 pages long and very clear, because ambiguity only leads to irrelevant quotations.
How Does RFQ in Procurement Work?
Let’s walk through how the RFQ request for quotation, or to be precise, the RFQ in procurement, usually works:
- Define the need: First, the buyer finalises the specifications, quantity, quality standards, delivery location, timeline, and mandatory terms. This is important because the more precise the RFQ is, the better the quotes will be.
- Prepare and share the RFQ: The buyer drafts a simple RFQ document and shares it either publicly (in case of large institutions or government procurement) or privately (to a list of prequalified vendors)
- Receive quotes from vendors: Vendors go through the RFQ and submit their prices, terms, and timelines. This stage is called quoting or bidding, depending on the industry.
- Evaluate and compare quotes: The buyer evaluates all the quotations received, usually focusing on price, but sometimes also on delivery time, brand, warranty, or vendor reliability.
- Negotiate (Optional): In some cases, the buyer might negotiate with one or more vendors to reduce cost or improve timelines.
- Place the order: The buyer issues a purchase order (PO) or contract to the selected vendor, based on the quote and agreed terms.
When Should You Use an RFQ?
You should use an RFQ in procurement when:
- The requirement is specific and not open-ended.
- You already have the technical knowledge or previous experience with the product/service.
- You want to compare prices quickly without long sales conversations.
- You’re not asking for “creative solutions”, just commercial offers
For example, if you are buying 100 office chairs with known specs, go for an RFQ request for quotation. If you’re revamping your entire office, an RFP might be better.
Difference Between RFP and RFQ in Procurement
Although RFQ request for quotation and RFP request for proposal sound similar, they’re used in completely different situations:
| Factor | RFQ (Request for Quotation) | RFP (Request for Proposal) |
| Objective | Get the best price for a specific need | Get the best solution for a problem |
| Requirement | Clear, defined | Vague, open to interpretation |
| Evaluation | Based on price | Based on value, creativity, and solution |
| Length | Short | Long |
| Use Case | Commodities, standard items | Complex projects or services |
Types of RFQs
- Open RFQ: Shared publicly so that any vendor can respond
- Closed RFQ: Sent to a fixed list of prequalified or empanelled vendors
- One-time RFQ: For one-time purchases
- Recurring RFQ: Issued for goods/services needed repeatedly
Some government departments and enterprises even use online RFQ portals to invite and manage responses.
For Sellers: How to Respond to an RFQ
If you’re a vendor or supplier, responding to RFQs is a crucial part of your sales process. Here’s how you can do it:
- Read carefully: Understand the specs and scope properly
- Respond point by point: Ensure your quote matches each requirement
- Include all pricing Details: Don’t just mention the unit price, include taxes, shipping, discounts, and warranty terms
- Mention validity: How long is your price valid? How many days?
- Stay professional: Use your company letterhead or quotation format
- Respect timelines: Never delay your response, especially in competitive bids
Pros of the RFQ Process
- Speed: Quicker than RFPs. You can finalize suppliers in days, not weeks.
- Clarity: Everyone’s on the same page. No room for assumptions.
- Cost Efficiency: Sellers are forced to stay competitive.
- Simple Documentation: No lengthy decks or technical proposals.
Cons of the RFQ Process
- No room for creativity: If a vendor has a better alternative, they can’t showcase it.
- Price wars: Some vendors may quote unsustainably low prices just to win.
- Overlooked value adds: Sellers offering better quality or post-sale support might lose out due to L1 criteria.
RFQ in Government Procurement
In government buying, RFQ, request for quotation, in procurement is used through portals like GeM, CPPP, and state-specific eProcurement platforms. These are usually for low-value, routine items where price is the main selection factor.
In fact, many GeM tenders start with an RFQ request for quotation or RA (reverse auction), depending on the buyer’s discretion.
If you’re a government seller looking to track and respond to RFQs without manually going through each tender, consider platforms like BidAssist. It sends you alerts for opportunities matching your product line.
RFQ Request for Quotation Is Important for You
Whether you’re a small business owner, a procurement officer, or a corporate vendor, understanding how an RFQ works gives you a serious edge.
For buyers, it ensures faster and more economical purchasing. For sellers, it’s a direct shot at winning business without having to go through complex technical rounds.
If you’re active in the B2B or B2G space, don’t overlook the power of a well-structured RFQ request for quotation. It’s simple, fast, and if done right, highly effective.
And if finding the right RFQs feels like a needle in a haystack problem, try BidAssist. It simplifies opportunity discovery so you can focus on what matters.