06 Nov
Table of Contents
“Request For” documents are some of the most common documents used in the business world. They’re used as a formal request from one company to another, with the nature of the request reflected in the document’s name.
Two examples of these documents are “Request For Proposal (RFP)” and “Request For Quotation (RFQ)”. Let’s take a quick look of these two documents to understand what they are, their processes and how to write them.
What is an RFP?
The “Request for Proposal” document is a document that you send out to vendors for proposals for a solution that you require. It’s often used when you don’t know what kind of service or products that you need.
It involves:
- Writing down the problems that you are facing.
- Receiving information on how vendors are able to solve those problems.
- Learning more about the qualifications of vendors.
- Informing vendors that you are in the market for a service or product.
- Comparing vendors and finding out which vendors fit your needs the most.
In a gist, it’s a communication tool for you to specify your problems and your needs while inviting vendors to suggest solutions.
RFP Process Basics
Writing an RFP can be a daunting task. Here are some things to to keep in mind while you plan out and write your RFP:
- Write your problems and needs as specific as possible.
- Be aware of your internal processes and share them in your proposal as needed.
- Indicate when you need the solution and be flexible to adjust.
- When receiving proposals, be prepared to explore the solutions and engage the vendors for more information if needed.
- Writing an RFP indicates that you are considering to commit to buying or hiring a service.
How to write an RFP
RFP can differ greatly from one another in terms of contents. Every organization has their own way of writing it. However, there are elements that stay consistent throughout:
- Define your current situation, your ideal situation and the solution you need.
- Define the ultimate goal.
- Define the scope of work.
- Define how proposals are evaluated.
- Ask for what kind of information vendors have to provide to you. This can include previous works, certifications or references.
At the point that you are writing your RFP, you should have a clear understanding of the issue that you are trying to solve. You should be able to provide, in detail, your requirements and specifications that you need from the vendor. By being specific, it helps you to increase the chances of receiving a proposal that matches your needs and finding vendors that are worthy of your time to engage.
What is an RFQ?
The “Request For Quotation” is a document you send out to vendors to determine the pricing and payment process for a specific service or product. You may think of an RFQ as an opposite to the RFP: it’s used when you know what you need and is looking for the best solution from a financial perspective.
Wikipedia defines it as: “a business process in which a company or public entity requests a quote from a supplier for the purchase of specific products or services.”
Request For Quotation typically involves:
- Writing down the requirements that you need.
- Inquiring on the payment terms and processes.
- Sending out to selected vendors that you’ve determined can provide you the relevant service or product.
- Compare quotations, engage and award your chosen vendor.
RFQ Process Basics
Here are some things to keep in mind when planning and writing your Request For Quotation document:
- You’ve already determined the type of service or products that you need.
- You’ve also determined which companies that you want to engage with.
- An RFQ indicates that you are already in a position to buy and that you’re committed to go through with hiring or purchasing.
- Similar to the RFP, it’s important that you write as specific as possible with your needs, expectations and ideal solution.
How To Write an RFQ
Request For Quotation documents tend to be a list of requirements that you want to present to your vendors. In that sense, the document tends to be short and concise. Here’s what you’ll want to include:
- A title with the type of service or product that you need.
- A closing date for submission & expected delivery date.
- A list of items that you need or service with quantity (if applicable).
- The payment terms and processes.
RFQs can differ from industry to industry. However, the points above are consistent throughout for each. Again, you’ll want to be as specific as you can when preparing your RFQ in order to maximize the chance of receiving quality service from your vendors.
In Summary: RFP vs RFQ
RFQs and RFPs are tools for you to receive an apple to apple and not apple to oranges comparison on price. With clearly defined requirements, vendor can provide accurate quotes. Without them, vendors will provide quotations based on their own understanding and requirements.
