Request for Quote (RFQ)

A request for quote (RFQ) is a buyer-issued procurement request inviting suppliers to provide prices and related terms for defined goods or services. “Request for quotation” is another common expansion of RFQ. The RFQ is the buyer’s request, while the quotation is the supplier’s response. This approach is most useful when requirements are sufficiently clear for suppliers to price the same scope.

How an RFQ Works

The buyer communicates a common set of requirements, obtains supplier quotations, and compares compliant responses against its selection criteria. A request for quote may be sent to selected suppliers; public advertising is not a defining requirement. Shared specifications give suppliers a consistent basis for pricing and help the buyer identify differences between offers. Suppliers can state assumptions, exclusions, or proposed alternatives in their responses, which the buyer must account for when comparing them. If a clarification changes the requirement, communicating that change to the suppliers involved helps maintain a common basis for comparison. The process supports a purchasing decision, but it does not guarantee savings or a particular outcome.

What an RFQ Includes

A useful request for quote describes the specifications or service scope, quantities, delivery requirements, and deadline for responses. For goods, this may mean defining dimensions, materials, performance requirements, or acceptable equivalents. For services, it may mean identifying deliverables, boundaries of the work, and expected completion dates. Relevant commercial terms can include payment arrangements, the currency of the quotation, and how long the offered price remains valid. The request may also explain whether prices should include transport, installation, taxes, or other applicable charges. Stating these expectations helps distinguish a genuinely comparable offer from a price that covers less work or leaves important costs unresolved.

Comparing Supplier Quotations

Price is often a major consideration, but the lowest headline price need not represent the best overall value. The criteria stated in a request for quote can also address delivery, quality, supplier qualifications, and commercial terms. Before ranking prices, the buyer checks whether each response meets the required scope and identifies any qualifications or exclusions. A cheaper offer that omits a required service cannot be compared directly with one that includes it.

Meaningful comparison therefore considers the cost of meeting the full requirement, not just the amount prominently displayed in a quotation. Differences in quantities, delivery schedules, additional charges, or payment terms may change the assessment. Where an offer is unclear, clarification is more reliable than assuming the supplier has included everything requested.

RFQ vs. RFP

• Purpose: A request for quote emphasizes pricing and terms for a defined requirement. A request for proposal (RFP) asks suppliers to explain a proposed solution, approach, and relevant capabilities as well as commercial terms.
• Requirement Clarity: An RFQ works best when the buyer can specify what suppliers should price. An RFP is generally more suitable when the buyer needs to assess different ways of meeting an objective; project complexity alone does not determine the choice.
• Response Content: An RFQ response centers on a quotation, including any assumptions or exceptions. An RFP response typically provides a broader explanation of how the supplier would deliver the proposed outcome.
• Evaluation: RFQ evaluation focuses on comparable offers that meet the stated requirement, without necessarily selecting the lowest price. RFP evaluation places greater emphasis on the merits of competing solutions and delivery approaches alongside cost.