What are the differences between an RFI vs RFQ vs RFP? While they may seem similar, a request for information (RFI), a request for quotation (RFQ) and a request for proposal (RFP) all have different definitions and serve different purposes within the procurement process. So how do you decide which RFx document you should use? It all comes down to what you’re trying to accomplish.
The difference between the RFI, RFQ and RFP is what information they provide:
- An RFI educates — RFI responses explore how a vendor might solve a problem or fill a need
- An RFQ quantifies — RFQ responses provide the cost of meeting a specific need
- An RFP compares — RFP responses evaluate the merits of each vendor compared to others
But that’s just the beginning. In this article we’ll explain how RFIs, RFQs and RFPs are related, how to select the right one, the purpose of each document, how to write them and examples of each.
RFIs, RFQs and RFPs are often used in combination with one another or independently. Sometimes you’ll need to start with a request for information to better understand your market, and then with that knowledge you may move to issue an RFQ or RFP. Each is a different tool, so which do you use?
According to Kevin Iwamoto, senior consultant at Goldspring Consulting, “All three have been used globally for decades to obtain relevant information from potential suppliers and are meant to create and establish a fair and equal weighted process where all vendors, incumbent and potential, have a chance to become a ‘preferred’ supplier for a corporation. They have been instrumental in enterprise risk mitigation, process standardization, cost savings and cost avoidance.”
The core purpose of each type of RFx document is to help select the perfect vendor. To select the perfect vendor, To do that you need answers to your critical questions, but how do you ensure you ask the right questions? It often comes down to whether you should issue a request for information (RFI), request for quotation (RFQ), or request for proposal (RFP).
RFPs, RFIs, and RFQs have very distinct purposes. So your first step is to clearly establish what you’re trying to achieve.
Start by answering these questions:
- Do you know what questions to ask a vendor?
- Are your questions very specific or more general?
- Do you already have a preferred vendor list (a shortlist)?
- Do you need to bid out the work through a formal RFP process?
- Are you working with repeat or first-time vendors?
- Do you know exactly what you’re looking for, or would you like vendors to make suggestions?
You should also have an internal discussion to get answers to these questions. Find additional RFP questions to ask your team in order to avoid setbacks down the road.