Purchasing Power – RFQ Request For Quotation
The Request for Quotation or RFQ is more for contacting suppliers for specific quotes on products of services you require. In the event that you have already engaged a supplier or vendor already you may seek to obtain a product or service not included in previous contracts.
Buyers will likely have previously identified vendors or suppliers who fulfil the various characteristics required for their needs. The next step is to compare best costs from the shortlist.
This request differs from the Request for Proposal (RFP) as it is usually not as complex.
Purchasing Power – RFQ Request For Quotation
Things to include
- What you expect. It’s important that you are straight to the point about what this request means to the supplier.
- When you expect this quotation by. It’s very likely you have a timeframe you need to work to, so put the vendor under pressure to give you the information you need.
- Define the format you expect a return on. This will help you to compile the relevant information and identify which vendors fit with your planning.
- Write as clear as possible. You aren’t writing up a contract but you need to be clear about what exactly you need, whether a product or service. There may be additional items vendors can add which gives incentive to use them, for example a warranty if not already included in your request.
- Terms and conditions. Buyers may already have a standard terms and conditions as part of their process, these should be in the Request for Quotation. Buyers should state expected service level and quality here.
Advantages
- Procurement process may be quicker
- Buyers will see very clearly differences between supplier/vendor offers.
- It is possible to get the best cost saving directly from the favoured vendors.
- Expands the number of potential choices and may give buyers the opportunity to test different vendors.
Disadvantages
- Buyers will only request from a limited number of vendors
- Unless the RFI process has already occurred buyers won’t know if all the costs received are the best in the market.
- By breaking up the procurement to individual segments the buyer may lose an advantage by not buying in bulk.
See also Request for Information (RFI).
