RFI vs RFP vs RFQ? Which Should It Be?

9/29/17 4:02 PM David Hulsen RFP Issuing

You need to make a supplier selection. To make the best selection, you need to gather specific information from potential vendors. Deciding what information to request from vendors throughout each stage of the selection process can be complicated. How do you know when to issue a Request for Proposal (RFP), a Request for Information (RFI), or a Request for Quotation (RFQ)?

In the article below, we outline the main differences between RFQs, RFPs, and RFIs. 

(If you already know you're ready for the RFP, this simple infographic explains how to write, send, and review an RFP in 9 steps or less.)
 

What's your end-goal?


 

RFPs, RFIs, and RFQs have very distinct purposes. Your first step is to clearly establish what you’re trying to achieve.

  • Do you know what questions to ask a vendor?

  • Are your questions very specific or more general?

  • Do you already have a preferred vendor list (a shortlist)?

  • Do you need to bid out the work through a formal process?

  • Are you working with repeat or first-time vendors?  

  • Do you know exactly what you’re looking for, or would you like vendors to make suggestions?

Ask yourself: What's your end goal? Your answer is the destination that determines the path.

 

RFP_vs._RFI

  

What is an RFI? 


 

An RFI is the formal means of getting general information from vendors. It's usually the first step in the vendor selection process. 

According to TechTarget, “An RFI is typically the first and most broadly cast of a series of requests intended to narrow down a list of candidates.”

Additional details:

  • An RFI is a casual first date in vendor management.
  • Questions should be open ended and high level.

When to use: Use RFIs early in your vendor selection process or if you have vague project requirements.

What it does: It gives you a broad scope (landscape) of your vendors.

Advantage: They're fast. You could email your initial questions to a shortlist of providers, get responses within a week, and then use their responses to craft an effective RFP.

 

What is an RFP? 


 

An RFP is a formal and structured way of getting specific vendor information (including pricing). It allows you to specify the problem you wish to solve and invites vendors to suggest solutions. 

Additional details:

  • RFP questions should be very specific.

  • The process can be lengthy and time-consuming. You should share internal information about your process and needs with your vendors.

When to use: Use RFPs when you have clear-cut needs and be ready to buy. You should be ready to move beyond exploration and into commitment. 

What it does: Helps you compare vendors based on your project scope and priorities.

Advantages:

  • RFPs are very thorough and offer a side-by-side, fact-based comparison of vendors' capabilities.

  • Basically, if an RFP is an intimate dinner-date, an RFI is grabbing a drink or getting coffee.

Learn more:

 

What is an RFQ? 


 

An RFQ is a request for pricing and payment information about a highly specific solution.

Additional details:

  • A list of requirements.
  • Centered around a vendor’s capabilities, costs, and payment terms.

When to use: Use RFQs when you already know what you're looking for and you want detailed pricing.

According to Investopedia, “When the soliciting company knows the exact number or type of product or services it desires, it customarily uses an RFQ. Typically, companies use an RFQ when products and services are standardized, or off-the-shelf.”

What it does: Issue RFQs when you know vendors can provide the solution you want and what it will cost.

Advantages: It’s incredibly specific. Organizations issuing RFQs are typically committed to making a purchase and already know what type of features and functionality they want to see. An RFQ document allows your team to evaluate all solutions that meet your organization's needs based on price.

 

Example RFI questions


 
Start by giving Responders some goal context.  Tell them who you are and what you're hoping to achieve.

For example: you are ABC Company, and you're looking to strengthen your relationship with customers through social media channels.You currently maintain a Facebook page, Twitter account, and LinkedIn presence.

Your challenge is to engage current customers and use their networks to refer your products/services to peers. Based on this scenario, here are some RFI questions you might ask:

  • What social media channels do you consider to be important for ABC Company and why?

  • What are your initial impressions of our social media presence?

  • How do you measure ROI for social media activities?

  • For efficient integration between our internal marketing and external service providers, what people, process, and technology factors do you think are important to consider? Are there limitations we need to know about?

  • As we get ready to prepare an RFP, what questions do you have for us?   

#PRO TIP: An RFI is especially helpful if you're new to your space (in this example, social media). Your bidders' responses will not only demonstrate their expertise, but also inform and educate you (with very little time invested by either party). Their answers can also help you nail down more concrete questions for the the eventual RFP. 


Example RFP questions


 

Be specific. Give parameters for the types of service or product you're looking for.

  • Ask for examples of their work. If you're looking for specialized/customized service, ask to see an example of that kind of work done for other clients.

  • Avoid sticker shock by requiring a comprehensive pricing plan.

  • Be as in-depth as you need to be. At this point, you both have skin in the game, so make sure your priority questions are as thorough as they need to be.

  • If you're unsure of a seller's expertise or competency for your needs, address it. Ask them for the examples, certifications, or references that will put you at ease.

  • How will you approach implementation of X?

#PRO TIP: Vague questions (at this point) don't do anyone any favors. You have specific expectations, whether you realize it or not. So if you're having problems writing exact requirement questions, collaborate with someone outside the situation who can help challenge assumptions.

Learn more:

Besides getting pricing and approach details, the RFP is a great place to get info on how you will work together. Ask how you can reduce risk, save time, and save money. Below are some examples.

  • What steps can we pursue to control costs and/or limit cost overruns? (You want to partner with someone who will work to get you the best deal). 

  • What risks to the time line or budget do you see, based on your understanding of our organization? (A high-level question like this gives you a sense of how much thought or effort they're putting into their response). 

  • How are you monitoring and staying ahead of trends in your industry? (Works as a kind of litmus test). 


Example RFQ questions


 
RFQs don’t typically contain questions, like an RFI or RFP would. Instead it’s a list of requirements, presented as line items, that vendors provide prices for. You’ll want to include:
  • Detailed list of products, features, and functionality required.

  • Quantity or duration required.

  • Date of expected delivery.

  • Payment terms.

#PRO TIP: Only use this document if you are already well aware of the marketplace conditions and offerings. This allows you to compare similar solutions based on price, rather than learning about solution offerings you may not currently be aware of.

 

Conclusion: RFI vs. RFP vs. RFQ: Which do you send? 


 
Bottom line, RFI, RFQ, or RFP? If you're shopping for very specific services and know exactly what you want, then an RFQ is your best best. If you're  close to a purchase but open to ideas, an RFP is probably the way to go. If you’re just trying to get an overview of your vendors or see if there’s a solution to your pain, then the simpler RFI might be the better choice.  RFI_vs._RFP_Conclusion.jpgLearn more: 
[Editor's Note: This post was originally published in April 2015 and has been updated for freshness, accuracy, and comprehensiveness.]