Ever wondered what the difference is between an RFI vs. RFP vs. RFQ? While they’re all meant to help construction firms gather certain types of information from vendors, they each have their own distinct use and purpose. The differentiating factor ultimately depends on what you’re trying to accomplish.
Individually and as a collective, these three requests are useful for picking the right vendor, which saves your construction firm money and reduces risk. Here, we go over the definition of each request, and how to know when to use one.
What is an RFI vs. RFP vs. RFQ?
RFX refers collectively to “request for …” and is commonly used to refer more generally to RFIs, RFPs, and RFQs, which are requests from a buyer to a vendor for information, proposals, and quotations. Here’s how we define each RFX and the difference in writing them.
A request for information is used to inform and allows a buyer to navigate through the various solutions that vendors will offer.
The process involves asking vendors about their services and products. During the planning stage, you’ll typically use an RFI to gather market details and more general information, using it to define your project’s requirements.
An RFI introduces a buyer to a vendor and gives an overview of what they have to offer, asking questions in the early stages of a potential purchase.
When writing an RFI, inform the vendor about your project and its goals, as well as its budget. At this point, there’s not yet a commitment or decision to purchase and you’re simply looking for more information on the vendor. Your segment should ideally be concise, but give enough detail so that the vendor knows how to help you.
Vendors should then respond to your inquiry by offering their perspectives on project goals. This and any follow-up information will offer valuable insight and inform you with more generalized statements.
When it comes to contrasting an RFI vs. RFP, an RFI is typically used as a precursor.
A request for proposal is used to compare vendors and allows a buyer to evaluate the amount of value a vendor will offer.
The process involves buyers collecting decision-making information to narrow the list down to a few potential vendors. It’s commonly used to document and justify why you’re choosing certain vendors over others.
An RFP delves deeper into your project’s needs and challenges, and should include more detailed questions about what solutions a vendor can offer. At this stage, you should be searching for more specificity in the products and services you’re seeking to meet your project’s unique requirements, and indicate that you’re looking to move beyond exploration to potentially make a purchase.
When writing an RFP, request what comprehensive pricing packages are offered to clients and ask more thorough questions to deepen engagement and investment in this potential business relationship. If your project requires specialized service, you can request an example of previous work done for other clients. If needed, you can also request references or consult reviews to verify the seller’s expertise.
For RFPs, it’s best to avoid ambiguity since your project will likely require at this point specific services or products.
When contrasting an RFP vs. RFI, an RFP is logically the next step that sees more specificity in planning.
A request for quotation is used to quantify cost and inform a buyer on the expense of obtaining a vendor’s service or product.
The process involves asking a vendor for detailed pricing, with a proposal offered to the buyer. At times, a buyer may issue an RFQ to search for the lowest price, but it’s important to also consider whether the service or product being offered meets the quality standards of your project.
An RFQ focuses more on costs and payment terms, as well as expected deliverables. At this stage, you should already know exactly what the project needs and should use the RFQ to indicate whether the vendor will be able to sufficiently provide what’s needed according to the project’s budget.
When writing an RFQ, list specifically what your project will require, including the ideal features and functions of a product or service. Include how long you’ll need a service, or how much of a product you’ll need, and a timeline for expected delivery. Ensure, also, that you state your preferred payment terms.
Here’s a run-down on when to use an RFI vs. RFP vs. RFQ.
An RFI should be used when you’re less informed on what’s needed for your project, and you’re looking for answers to a project’s requirements. It asks more generalized questions to inform and educate.
The tone should be more of an initial inquiry and does not need to be comprehensive, and you’ll get a quick answer as to what the next step of your project should be.
An RFP should be used when you’ve decided on what’s needed and you’re wanting to pick specific vendors. It asks more detailed questions about a vendor’s business offerings.
The tone should be directed towards a vendor, and you’ll be provided with information that allows you to compare what a vendor can offer.
An RFQ should be used when you want to explore your options financially. It asks for payment details, such as expenses, and states payment terms.
The tone should be more structured, and ideally, the RFQ would allow you to narrow down on vendors by price.
When it comes to an RFI vs. RFP vs. RFQ, each one achieves a unique goal, but they often work in tandem to help managers select the vendor best suited to their project’s needs. RFXs document the process of vendor selection, with the process of managing RFIs, RFQs and RFPs referred to as ‘request management’. Each step is as important as the other.
Looking to eliminate the headache of workforce management? Bridgit Bench empowers managers and allows them to modernize their processes. Manage your workforce with a cloud-based organizational dashboard that lets you track project progress and manage construction personnel.
Choose Bridgit Bench today!