When to Use RFI, RFP or RFQ as a Sourcing Tool?

Whether you call them in the short form RFI, RFQ or RFP or long as in Request for Information, Request for Quote or Request for Proposal, the choice of which document to use depends on the desired outcome on the type of sourcing project: 

Is it information, a firm proposal or a detailed price bid that is needed?

Below you will find When to use each of these tools, Why Use Them and What Should be Included in Each!

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Quick Overview of When to Use RFI, RFQ & RFP, Including RFB - Request for Bids!

What is a Request for Information (RFI)?

A Request for Information (RFI) is a method of collating information from different suppliers prior to formally sourcing products or services. It is normally used where there are many potential suppliers and not enough information is known about them. It is a structured process where a long list of potential suppliers can be reduced to a short list of those organizations that are willing and able to fulfill your requirements.

What to Include in a Request for Information (RFI)?

An RFI should include:

• Table of contents
• Introduction and purpose of the RFI
• Explanation of scope
• Abbreviations and terminology
• Template to complete
• Details of next steps - RFP or RFQ

Why use a Request for Information (RFI)?

• To compile detail about potential suppliers and their capabilities
• To advise potential suppliers that you intend to source this product or service competitively
• To show that you are acting fairly and including all participants
• To gather information in a way that decides the next step

What is a Request for Proposal (RFP)?

A Request for Proposal (RFP) is a formal method of receiving detailed and comparable proposals from different suppliers for a defined product or service. It is a comprehensive document that should provide all the required information needed to make an informed purchasing decision.

Preparation of the RFP is important and time spent at this stage will ensure good responses. Often an information meeting is held to brief suppliers and answer any questions. An RFI may be used prior to an RFP if needed.

What to Include in a Request for Proposal (RFP)?

An RFP should include at least the following:

• Table of contents
• Confidentiality or non-disclosure agreement
• Basic information about the client and the process
• Extent and scope of the project
• Proposed time frame
• Detailed design information and requirements
• Commercial requirements
• Budget
• Evaluation and award criteria
• Submission instructions

Why use a Request for Proposal (RFP)?

• You are notifying suppliers of your intention to buy certain products or services.
• You get a formal submission from the chosen suppliers to enable comparison of the proposals
• You show that you have a formal and fair process without favoring a preferred supplier.

What is a Request for Quotation (RFQ)?

A Request for Quotation (RFQ) is a competitive bid document used when inviting suppliers and subcontractors to submit a bid on projects or products. An RFQ is suitable for sourcing products that are standardized or produced in repetitive quantities.

A technical specification must be provided as well as commercial requirements. Sometimes an RFQ can be preceded by an RFP where the shortlisted suppliers are requested to provide a more detailed price quote.

In conclusion, the RFI, RFP and RFQ are all tools that can be used separately or in combination to achieve a successful sourcing solution.

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