Let’s define three terms a Purchasing person might use in requesting information from a potential vendor: RFP, RFQ and RFI.
The first two letters are consistent and mean Request For while the last letters of “P,” “Q,” and “I” stand for Proposal, Quote or Information. While they may sound similar, they are actually very different and submitting the wrong one could get you disqualified from a bid and end up wasting a lot of your time.
The shortest and simplest would be an RFQ. A Purchasing employee simply wants to know how much you will charge for an item or service. An RFQ as issued would be one page to a page and half from the Purchasing department. In addition to describing the item or service, the request and the response should include the payment terms and delivery information as well. This is a streamlined request. Potential vendors should not demonstrate their novel writing skills in their responses.
An intermediate length request is for information. The Buyer definitely wants to know the price here too, but is also asking for more details about the company and potential relationship between the parties. An appropriate response here includes answering the Buyer’s questions while also including some sales literature that extols the virtue of your company. It’s OK to be a little more aggressive in responses here. Personally, I don’t generally use an RFI as I think it’s a little too open to interpretation of what the Buyer wants.
The most complicated of the three is the famed proposal. This is the “full length, put it in a binder, make nice spreadsheets, the company is going to be spending some serious money on this new project”- type of request. RFP’s are formal documents and often contain the vendor’s draft of a standard contract. A good job here will move the vendor to the finalist list. What is presented here will be the basis of contract negotiations should the vendor be selected.
For a different perspective on proposals, check out the Landing The Deal Blog as well as my response.
Please send your Purchasing questions to PurchaseRealm@ComprehensiveAdvice.com and look for the answers in future posts.
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