Difference Between RFI RFP and RFQ

Key Difference – RFI RFP vs RFQ
 

RFI, RFP and RFQ are three types of documents used in project selection criteria. Some projects use all three documents in order to select suppliers, receive project proposals and quotations from them. RFI, RFP and RFQ are vital tools that can be used to achieve a successful sourcing solution. The key difference between RFI, RFP and RFQ is that RFI (Request For Information) is a document used to collect information from different suppliers in order to decide from which supplier the company should sources products or services whereas RFP (Request For Proposal) is a document in which the company requests details of detailed and comparable proposals from different suppliers for a defined product or service and RFQ (Request For Quotation) is a competitive bid document used to invite suppliers to submit a bid on projects. 

CONTENTS
1. Overview and Key Difference
2. Wha is RFI
3. What is RFP
4. What is RFQ
5. Side by Side Comparison – RFI, RFP vs RFQ
6. Summary

What is RFI?

RFI (Request for Information) is a document in which information from different suppliers are collected in order to decide from which supplier the company should source products or services. This method becomes useful when there are many potential suppliers to choose from. This allows the organization to shortlist potential suppliers and select the most suitable supplier or suppliers.  Components in an RFI is listed below.

• Table of contents
• Introduction (purpose of the RFI)
• Scope of the RFI
• Template to complete
• Details of the next steps

E.g., Company K is a law firm that wishes to build two new offices in two cities.  Company K identifies five potential suppliers who can complete the construction of the offices. Company K does not know thorough details about any of these suppliers, thus sends out an RFI in order to receive more information about them.

What is RFP?

RFP (Request for Proposal) is a document in which the company requests details of comprehensive and comparable proposals from different suppliers for a defined product or service. It is an all-inclusive document that should provide all the required information needed to make an informed purchasing decision. The company should spend sufficient time on this in order to list out all the specifications that they want to know from the suppliers. RFP will be requested after carrying out an RFI. The following criteria should be included in an RFP.

• Table of contents
• Basic information regarding the client and the process
• Scope of the project
• Intended time frame of the project
• Business requirements
• Budget for the project
• Quality specifications
• Submission criteria
• Evaluation standards

Continuing from the above example,

E.g., Company K receives the information from the five potential suppliers and decides three suppliers meet the company requirement. K wants to know the details of the project proposals by each of the three suppliers, thus sends out an RFP.

What is RFQ?

RFQ (Request for Quotation) is a competitive bid document used to invite suppliers to submit a bid on projects. An RFQ should include a technical specification along with commercial requirements. RFQ is also referred to as IFB (Invitation for Bid). Usually, an RFQ is preceded by an RFP where the shortlisted suppliers are requested to provide a more detailed price quotation. The following components should be included in an RFQ.

• Invitation for quotation
• Quotation specification
• Pricing quotation
• Evaluation criteria

Continuing from the above example,

E.g. After evaluating all three project proposals, K prefers the proposals of two suppliers. Thus, K decides to ask for a quotation from the respective suppliers and sends out an RFQ.

What is the difference between RFI RFP and RFQ?

RFI vs RFP vs RFQ
Refundability
RFI	RFI is a document that is used to collect information from different suppliers for a project.
RFP	RFP is a document used to request detailed and comparable proposals from different suppliers for the project.
RFQ	RFQ is a competitive bid document used to invite suppliers to bid on the project.
Need for Comprehensive Pricing Information
RFI	At the RFI stage, need for comprehensive pricing information is very limited since the company does not know if the suppliers will be willing to bid.
RFP	RFP Stage does require pricing information as a part of the project proposal.
RFQ	In the RFQ stage, a highly comprehensive pricing information is required.
Level of Supplier Association
RFI	Supplier association is encouraged in RFI
RFP	Supplier association is requested in RFP stage via project proposal.
RFQ	In the RFQ stage the association of suppliers is vital since following this stage, the company decides which supplier to contract out the project.

Summary – RFI vs RFP vs RFQ

The difference between RFI RFP and RFQ depends on whether these documents ae used to obtain information from suppliers (RFI), to request a project proposal (RFP) or to request a quotation (RFQ).  With the increase in the internet usage, most companies completely process these documents via the internet. Selecting the most suitable suppliers among many remains important criteria in order to obtain the best possible price and quality. However such selection criteria may consume a significant time period.

Reference:
1.”RFI, RFP, RFQ.” Http://www.purchasing-procurement-center.com. N.p., n.d. Web. 04 May 2017. <http://www.purchasing-procurement-center.com/rfi-rfp-rfq.html>.
2.”Request for Information (RFI).” Request for Information (RFI) | Training Industry. N.p., n.d. Web. 04 May 2017. <https://www.trainingindustry.com/wiki/entries/request-for-information-(rfi).aspx>.
3.”Request for Proposal Template – Download Free Sample.” Create, send, eSign, and track documents online with PandaDoc. N.p., n.d. Web. 04 May 2017. <https://www.pandadoc.com/request-for-proposal-template>.
4.”Request For Quote – RFQ.” Investopedia. N.p., 10 Jan. 2011. Web. 04 May 2017. <http://www.investopedia.com/terms/r/request-for-quote.asp>.