A request for quotation (RFQ) in construction presents vendors with the opportunity to bid for work. In this article, we’ll take a closer look at how RFQs work and how you can respond to them more effectively as part of a cohesive construction bidding strategy.
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What is an RFQ in construction?
A request for quotation (RFQ) in construction is a pricing request that an owner, general contractor, or subcontractor sends down the chain to contractors and suppliers once the scope, quantities, and specifications are fixed. Because every bidder is pricing the same requirements, the responses differ on price and delivery rather than on how the work gets done.
In construction the same three letters also stand for request for qualifications, a prequalification document that asks who is capable of the work rather than what the work will cost. This guide covers the quotation sense.
At this high level, an RFQ might seem similar to a request for proposal (RFP). However, these types of correspondences have different use cases. Companies issue RFQs when they know exactly what they want whereas RFPs allow for a greater level of input from vendors regarding specifications.
What does this look like in practice? Well, an RFQ might be used to gauge pricing on a specific amount of materials. An RFP, meanwhile, would be used to gauge pricing for large-scale services such as construction project management or general contracting.
Characteristics of an RFQ in construction
Next, let’s look at some characteristics of appropriately-used RFQs in construction.
Specificity
Given that RFQs are primarily used when a project’s requirements are very clear, this type of correspondence logically includes very detailed lists of those needs.
Recall the aforementioned example of an RFQ issued to obtain pricing information regarding a set amount of material. In some cases, owners may provide a detailed breakdown of functional requirements and leave the material calculation up to vendors.
With either approach, RFQs provide a great deal of specificity.
Aimed at gauging more than just cost
While RFQs lend themselves well to situations in which senders are looking for the best possible price on a predetermined set of products or services, the cost is typically just one of several factors being evaluated.
A vendor’s capability to deliver the specific services required is also an important consideration. An RFQ’s sender gauges this based on each vendor’s response to questions concerning delivery dates, bulk order discounts, and the like.
It’s important to keep this in mind when responding to an RFQ. The lowest price may not necessarily get you the contract.
RFQ vs RFP in construction
An RFQ and an RFP in construction differ on one thing: how much of the scope is still open. You send an RFQ when the requirements are already fixed and you want a price on them. You send a request for proposal (RFP) when you need the bidder to tell you how they would do the work, and you plan to weigh that approach alongside price. That is why an RFQ usually goes out for a defined package, like a material buy or a trade scope with complete drawings, and an RFP goes out for services where the method matters, like general contracting, construction management, or a design-build package.
What comes back is different too. The response to an RFQ is a priced schedule on your own form: the line items you sent, with numbers in the quote column. The response to an RFP is a proposal, which means an approach, a schedule, a team, qualifications, and a price together. Federal contracting draws the line in writing. FAR 13.004 says a quotation is not an offer, and FAR 15.203 requires an RFP to state the requirement, the terms, what the proposal must contain, and how proposals will be scored. CSI MasterFormat keeps the two apart as well, filing bid forms under 00 41 00 and proposal forms under 00 42 00.
| RFQ (request for quotation) | RFP (request for proposal) | |
|---|---|---|
| What it asks for | A price on a scope that is already written | An approach and a price for a scope that still needs the bidder’s input |
| When you use it | Once drawings, specs, and quantities are complete enough to price | When method, sequence, or team will decide the award along with price |
| How specified the scope is | Fully. Nothing left for the bidder to define | Partly. The bidder proposes how the work gets done |
| Who typically sends it | Owner to GC or CM; GC or CM to trade subs; subs to suppliers | Owner to GC, CM, or design-build team; GC to specialty trades on complex packages |
| What the vendor returns | A priced schedule on the issuer’s form | A proposal: approach, schedule, team, qualifications, and price |
If the document in front of you asks for your approach and not just your numbers, our guide to handling a request for proposal in construction covers the response. For the three-way version see RFI vs RFP vs RFQ. An RFI during construction is a clarification request against the drawings and specs, and our construction RFI guide covers that one.
RFQ example in construction
Now, let’s look at an example of an RFQ in construction and how it might fit into a typical procurement process.
A developer is looking to build a residential skyscraper. They issue RFPs to a number of general contractors potentially capable of handling the project. The general contractors, in turn, issue RFPs to subcontractors that will handle distinct components of the project, such as:
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concrete pourers
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electricians
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plumbers
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landscapers
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floor installers
Now, these subcontractors don’t make the materials they install. They buy them from vendors. This is where RFQs come into play.
Subcontractors don’t need much input from vendors providing materials because the project’s specifications have already been determined higher up in the chain. As such, an RFQ is the ideal means through which subcontractors can procure pricing information for materials related to the services they’re bringing to the project.
An electrical contractor, for example, might issue an RFQ for a specific type and length of cabling.
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Construction RFQ template
Now that you know what an RFQ in construction is and where it typically fits into the project management pipeline, let’s look at the essential components.
Keep in mind it’s not uncommon for an RFQ to fit neatly on a single page.
A construction RFQ template has four parts:
- Project and contractor information. Who is asking, for which project, and how to reach them.
- Scope and requirements. The line items to be priced, with quantities and descriptions. This is the table below.
- Project schedule. When the items are needed on site and when the quote is due.
- Response instructions. Where to send the quote, in what format, and how long the pricing has to hold.
Project and contractor information
Construction RFQ templates typically include basic information about the project, such as its location. A letterhead providing information about the contractor sending the RFQ, including their contact information, is also typical.
Scope and requirements
Following information about the project and requester comes arguably the most important part of an RFQ: a breakdown of the exact needs that must be met.
As mentioned earlier, the specificity of this section is essential for receiving accurate pricing information. On the vendor side of things, understanding the specific requirements in this section is key for delivering an appropriate quote.
The scope and requirements section is typically arranged in a chart format with the following columns. Here is the shape, using the electrical contractor from the example above:
| Item needed | Quantity | Description | Quote |
|---|---|---|---|
| 12 AWG THHN copper wire | 5,000 ft | Stranded, 600V, black, on 500 ft reels | |
| 3/4 in. EMT conduit | 1,200 ft | Galvanized steel, 10 ft lengths | |
| 4 in. square junction box | 250 ea | Steel, 1-1/2 in. deep, with flat cover |
The requester fills in the first three columns. The quote column ships empty and the vendor fills it in. A table that already has prices in it is a returned quote, not an RFQ.
Project schedule
Of course, a great quote means very little if the products or services being sought after aren’t available on time. This is why RFQs typically include information that would help vendors gauge deadlines, including for response to the request itself.
Beyond the benefits we’ve already mentioned, the inclusion of this information is a key part of vendor management since it can help those who lack the capacity to deliver what’s needed on-time self-disqualify.
Need to write an executive summary? Check out this guide for some tips.
Tips for managing the RFQ process successfully
No matter which side of the table you sit at, managing the RFQ process successfully is imperative. Here are some tips for doing so, whether you’re a vendor or a contractor seeking quotes.
Rely on resource management data when identifying quantities
Having to issue a new round of RFQs because your initial requirements were ill-defined can be a major inconvenience. Get things right the first time by letting resource management data influence initial calculations. Look through data from prior projects to determine ideal quantities.
Teams that centralize resource planning for preconstruction in Bridgit can check how comparable past projects were actually staffed, by role and by month, before committing a labor quantity to the request.
Make sure you understand the requirements fully before responding to an RFQ
Savvy contractors read through the scope and requirements section of an RFQ very carefully before responding.
Remember, the services being sought after via an RFQ are very well-defined. Assuming the requester has done their homework, they know exactly what they need to ensure successful project completion.
This should make your job relatively straightforward – as long as you understand the requirements.
If you don’t, you’re better off asking questions than submitting an incorrect bid.
Keep response deadlines in mind
On the vendor side, you definitely don’t want to miss submission deadlines for an RFQ. Doing so raises questions regarding your ability to handle the project and deliver the necessary items on time.
On the requester side, keep in mind that selecting a winning offer may not be as quick a process as you might expect. Arrange your submission deadlines in such a way that you have breathing room.
When responding to an RFQ, build a case concerning your capability to handle the client’s needs
Just because a prospective client has issued an RFQ to you doesn’t mean they have full confidence in your ability to handle their needs. You’d still be wise to build a case.
Many vendors append information about themselves, including their volume capabilities, to the construction RFQ template upon responding. Some go a step further and include information regarding their approach to delivering the required materials (i.e. applicable warranties, return periods, etc).
RFQ FAQ
What is RFQ and RFT?
An RFQ (Request for Quotation) is a document used to invite suppliers to bid on specific products or services. An RFT (Request for Tender) is a formal invitation for suppliers to submit detailed proposals on a project, often used in construction to get competitive bids.
Who submits RFQ?
An RFQ is typically submitted by project owners or general contractors seeking detailed pricing from vendors or subcontractors for specific products or services needed for a project.
What is the difference between RFQ and BOQ?
An RFQ (Request for Quotation) seeks pricing information for specific items or services. A BOQ (Bill of Quantities) is a detailed document that lists the quantities and specifications of materials and labor required for a project, often used to facilitate accurate bidding and project planning.
What is the difference between RFQ and tendering?
An RFQ (Request for Quotation) is a request for specific pricing information on predefined items or services, usually for smaller or more straightforward projects. Tendering, often initiated by an RFT (Request for Tender), involves a more formal and detailed process where suppliers submit comprehensive proposals for larger or more complex projects.
What is the difference between RFI and RFP and RFQ?
- RFI (Request for Information): Used to gather general information about a vendor’s capabilities or to clarify project details.
- RFQ (Request for Quotation): Requests specific pricing information for defined products or services.
- RFP (Request for Proposal): Solicits detailed proposals on how vendors would execute a project, including pricing, methods, and timelines.
We hope this guide has helped you understand the construction RFQ process and what goes into it.
In summary, RFQs are used by contractors seeking pricing information for very specific goods and services. This specificity is what differentiates RFQs from other types of requests, such as RFPs, which are typically used when pricing large-scale services such as general contracting.
For more construction management-related guides, visit our blog.
