What is the Difference Between a Request for Proposal & a Request for a

Quotation?

Requests for proposals (RFPs) and requests for quotations (RFQs) are both
important to corporate procurement processes. Companies use them as
applicable to procure needed products and services. However, each has a
very unique application in the procurement process.

Request for Proposal

1. A request for proposal is a document companies use to solicit bids on
special projects or the development of a new product or service. Companies
wishing to bid will review the RFP and then write a detailed proposal
specifying how they will complete the project and the associated cost. After
receiving several proposals, the company issuing the RFP can choose the
best option.

Request for Quotation

2. A request for quotation is a document companies use to invite bids
regarding the purchase of an existing product or service. Upon receiving
bids, the company issuing the RFQ can compare and choose.

Key Differences
3. A RFP is used when the purchase or procurement involves a complex
development project, such as a software development project or a
construction project. Conversely, a RFQ comes into play when a company is
simply looking to purchase an existing, or "off the shelf," product or service;
in this case they can use the RFQ process to compare prices.
1. Request for proposals (RFPs) and request for quotes (RFQs) are
required in both public and private sectors, though RFPs are more formal
than RFQs. A "pre-qualifier" for either an RFP or an RFQ is known as a
request for information (RFI). In some cases, a company or the government
may distrRequest for proposals (RFPs) and request for quotes (RFQs) are
required in both public and private sectors, though RFPs are more formal
than RFQs. A "pre-qualifier" for either an RFP or an RFQ is known as a
 request for information (RFI). In some cases, a company or the government
may distribute a RFI to determine whether or not a vendor shall receive an
RFP or an RFQ. A vendor is the person or party responsible for providing
products or services for an RFP or RFQ.

Time Requied for Document Preparation

2. One difference between a request for proposal (RFP) and a request for
quote (RFQ) is that more time is required to prepare an RFP than a RFQ.
Request for proposals list requirements of products or services, such as
function, work flow, integration specifications and business goals, so that
vendors will answer the proposal--explaining in great detail how the
requested product or service will be accommodated. Requests for proposals
include a scope of work (SOW), pricing information, price quotes, contract
terms and conditions, and detailed reference information. The scope of work
describes tasks, products, services and even external factors that may not be
required to satisfy the proposal.

Features
3. A request for proposals is developed when an organization has
discovered a need to resolve an issue, without a specific plan for the way
that the need should be fulfilled. In this particular situation, an organization
allows vendors to express individual creativity when presenting their
products or services as a response to a request for a proposal. In contrast, a
request for quotes is developed when an organization has determined an
exact product or service required to resolve its need. This makes it easier to
focus upon the vendors' level of experience and also the price that vendors
want to be paid for their products or services.

Example in IT Industry
4. An information technology (IT) department may need web-based
email, a specific operating system and a database. Once these requirements
are expressed in a request for proposal, vendors respond by detailing how
they would accommodate the information technology department. The
solutions presented by vendors usually vary--as some solutions may require
less time, less effort and less money than others. These savings would be
beneficial to the information technology department in this example. 
If an IT department has determined that it needs a Windows Vista operating
system while connected to Windows Virtual Server 2005, for example, this
firmly stated need would be expressed in a request for a quote.
4. ibute a RFI to determine whether or not a vendor shall receive an RFP
or an RFQ. A vendor is the person or party responsible for providing
products or services for an RFP or RFQ.

Time Requied for Document Preparation

5. One difference between a request for proposal (RFP) and a request for
quote (RFQ) is that more time is required to prepare an RFP than a
RFQ. Request for proposals list requirements of products or services,
such as function, work flow, integration specifications
and business goals, so that vendors will answer the proposal--
explaining in great detail how the requested product or service will be
accommodated. Requests for proposals include a scope of
work (SOW), pricing information, price quotes, contract terms and
conditions, and detailed reference information. The scope of work
describes tasks, products, services and even external factors that may
not be required to satisfy the proposal.

Features
6. A request for proposals is developed when an organization has
discovered a need to resolve an issue, without a specific plan for the
way that the need should be fulfilled. In this particular situation, an
organization allows vendors to express individual creativity when
presenting their products or services as a response to a request for a
proposal. In contrast, a request for quotes is developed when an
organization has determined an exact product or service required to
resolve its need. This makes it easier to focus upon the vendors' level
of experience and also the price that vendors want to be paid for their
products or services.

Example in IT Industry
7. An information technology (IT) department may need web-based
email, a specific operating system and a database. Once these
requirements are expressed in a request for proposal, vendors respond
by detailing how they would accommodate the information
 technology department. The solutions presented by vendors usually
vary--as some solutions may require less time, less effort and less
money than others. These savings would be beneficial to the
information technology department in this example. 

If an IT department has determined that it needs a Windows Vista

operating system while connected to Windows Virtual Server 2005,
for example, this firmly stated need would be expressed in a request
for a quote.
X---------x-----------X___________---------X-------

Request for Quotation (RFQ)

RFQ’s are best suited to products and services that are as standardised and as
commoditised as possible. Why? To make the suppliers’ quotes comparable.

An RFQ is a solicitation sent to potential suppliers containing in exacting

detail a list or description of all relevant parameters of the intended
purchase, such as:

 Personnel skills or competencies

 Part descriptions/specifications or numbers
 Quantities/Volumes
 Description or drawings
 Quality levels
 Delivery requirements
 Term of contract
 Terms and conditions
 Other value added requirements or terms
 Draft contract

Price per item or per unit of service is the bottom-line with RFQ's, with
other dimensions of the deal impacting the analysis process as determined
by the buyer. Supplier decisions are typically made following a comparison
and analysis of the RFQ responses.

RFQs are typically used as supporting documentation for sealed bids (either
single-round or multi-round) and may be a logical pre-cursor to an electronic
reverse auction.

Request for Tender (RFT)

An RFT is an open invitation for suppliers to respond to a defined need as

opposed to a request being sent to potential suppliers. The RFT usually
requests information required from a RFI. This will usually cover not only
product and service offerings, but will also include information about the
suitability of the business.

It is not unusual for a buyer to put out unclear or vague business

requirements for an RFT. This makes it challenging for the supplier to
propose a solution. This is not the best use of a RFT. RFT’s should only be
used when the buyer is clear on their requirements, and is also clear on the
range of possible solutions that might fit the buyer's needs.

A RFT is not a very time or cost efficient method to source supply due to its
lack of defined business requirements and open invitation for suppliers to
respond.

Request for Proposal (RFP)

An RFP is a solicitation sent to potential suppliers with whom a creative

relationship or partnership is being considered. Typically, the RFP leaves all
or part of the precise structure and format of the response to the discretion of
the suppliers. Indeed, the creativity and innovation that suppliers choose to
build into their proposals may be used to distinguish one from another.

Effective RFPs typically reflect the strategy and short/long-term business

objectives, providing detailed insight upon which suppliers will be able to
offer a perspective. If there are specific problems to be addressed in the RFP
response, those are described along with whatever root cause assessment is
available.
While specific data, offerings and quotations may be sought, questions about
the following will make up a significant portion of both an RFT an RFP:

 The specific items on which the suppliers are proposing

 Business requirements
 Performance measures
 Information
 Ideas
 Instructions on how to reply
 Due date
 How will we evaluate how feedback will work
 Describe the process for selection
 Request for cost breakdown (sometimes)
 Communication: cover letter (sets the stage), calls in advance
 Who to contact with questions
 Addressee - chosen carefully

Request for Proposal (RFP)

Requests for Proposals (RFP) are used to directly purchase goods or
services. The requesting company clearly understands their business
problem or need and is aware that there are potential options available in the
market place, but is open to suggestions for solutions to their problem. This
is quite often requested for consulting services, where the exact physical
deliverables cannot be defined, or in information and communication
technologies (ICT) projects where there are multiple solutions to a business
problem.

The RFP gives the purchasing company with the most flexibility in
purchasing, as although the requirements may be defined, the solution is not.
The requirements stipulated by the RFP may range from being quite specific
 or be broad, high level business requirements. However, by nature, an RFP
will allow an offer to suggest the best way to solve the problem. RFP's
provides responding companies the best opportunity to demonstrate the way
in which they would solve a company's business problems or needs.

Once an RFP has been evaluated, the requesting company may end up in a
number of situations such as:

 deciding on a preferred solution or service provider, and negotiate a

contract with them
 shortlisting some preferred candidates, and enter into negotiations
with all of them, as a tactic to find the best option
 deciding to accept part of a solution from one or more vendors, if they
are not convinced that any one solution is acceptable
 deciding that there is no acceptable solution and changing their
requirements, and either asking for further submissions from companies that
have responded to the RFP, or closing this particular RFP and starting again
Request for Tender (RFT)
Requests for Tender are often using in the building and construction industry
where the solutions to a problem are very specific, and have been designed
and specified. An example is a tender for construction of a house or bridge,
where the designers have drawn up the plans with measurements, and all
materials have been clearly specified. I can't imaging many people
requesting a tender for a "four bedroom house" and not telling the
prospective builder what they want it to look like!

For a tenderer responding to a RFT, there are not many variables or options
to offer different solutions. Tenders are not normally used for this reason. It
could limit flexibility and creativity, which is an issue if a requesting
company has not done much investigation into available solution. On the
other hand, if you know your specific requirements, and don't want any
deviation from these specifications, then you use a RFT.

In summary, the best option for most purposes and flexibility in procurement
is a RFP. If requirements for a project are very specific, and any deviations
from your specifications are not acceptable, then use a RFT. However, if a
company has limited information as to options available in the market, an
EOI could be a good start.

Request for Proposal (RFP, RFPs), Request for Tender (RFT,

RFTs)

In certain cases, when the value of a government contract exceeds

$100,000 and when it necessitates a highly technical product or service,
the government may buy by negotiation.

 Request for Proposal (RFPs, RFP)

 Request for Tender (RFTs, RFT)
 Request for Quotations (RFQs, RFQ)

Buying by negotiation involves the issuance of a Request for Proposal

(RFPs, RFP), Request for Tender (RFTs, RFT), or Request for
Quotations (RFQs, RFQ), and the negotiation of each element in the
proposal. An award is made to the proposer who has the best proposal
in terms of both technical content and price.

Negotiation procedures may be applied to more-or-less standard items,

when negotiation authority has been properly documented by the
contracting office. Products or services may be purchased by
negotiation when it is impossible to draft adequate specifications or to
describe fully the specific item, service, or project.

When buying by negotiation, the government uses procedures that

differ from sealed bidding. Buying by negotiation is authorized in
certain circumstances by law under applicable Federal regulations
(Federal Acquisition Regulation or FAR).

Negotiated contracts often over advanced technology not widely

supplied by small businesses and may include very complex areas of
research and development, projects connected with highly sophisticated
systems, missile programs, and aircraft and weapons systems.

In most instances, the government uses oral solicitations for purchases

less than $25,000, written solicitations for purchases over $25,000, and
purchase cards to obtain micro-purchases less than $2,500.