While they might seem similar, they do have different meanings. These two terms perform different purposes within the procurement process. These are related to the process of giving and receiving information between two companies. Both RFQ and RFP belong to the family of RFx documents.
- RFQ is a request for a quotation, while RFP is a request for a proposal.
- RFQ is used to compare prices of products or services, while RFP is used to evaluate the proposed solutions to a problem.
- RFQ requires a detailed specification of the requested product or service, while RFP requires a detailed description of the problem to be solved.
RFQ vs RFP
RFQ (Request For Quotation) is a type of document which organizations use to find the prices of products or services. Financial information can also be analyzed through RFQ. RFP (Request For Proposal) is a document sent to the vendors by the companies. The purpose is to collect data.
An RFQ is a request for a quotation of price and information on payment methods. The buyer gets the exact number for the exact type of product or service he/she wishes for. An RFQ contains a list of requirements so that the vendor can provide the price for each requirement separately.
In an RFP, the questions should be very specific. Through this, buyers can get specific information about the vendors and their experience. The buyer can also mention the problems he/she is facing and ask for suggestions and solutions from the vendor.
The vendors can offer a particular strategy, and the buyer can perceive their skills based on the solution they provide.
|Parameters of Comparison||RFQ||RFP|
|Full form||The full form of RFQ is Request For Quotation.||RFP stands for Request For Proposal.|
|Purpose||The purpose of RFQ is to analyze the financial details.||The purpose of RFP is to let you shop around and compare various factors before making a definite choice.|
|Style||Style of writing RFQ should be structured and prescriptive.||The style of RFP should be direct and maintain the formal language.|
|Asks||RFQ should contain questions to know the cost of the requirements.||In RFP, one should ask specific questions to get details about the service, product, and business.|
|Advantage||Through RFQ, one gets to know the specific price and does not get overwhelmed with other details.||Through RFP, the buyer gets to compare all the offers and capabilities and clearly understand to make a decision.|
What is RFQ?
A Request for Quotation, or RFQ, is a document that companies use to ask for the price of services or products. Before the procurement of goods, this document explains that the buyer wants to buy and asks for the price from the vendor. The RFQ will tell the requirements in detail with quantity.
A buyer or a company will send the RFQ to the vendors or other companies with whom the buyer is interested in doing business. After getting the RFQ, the vendors will send a response which is the quotation of the price in detail. From these responses, the buyer can decide the best deal for him/her.
Not only the cost, but this application can also include a detailed list of products, and their features, quantity of the products, methods of payment, and expected delivery date.
RFQ is asked from vendors before making a large-scale purchase or before signing a big long-term contract. This document gives the buyer an opportunity to compare all the vendors’ offers and get a reasonable and best business deal.
What is RFP?
RFP, or Request for Proposal, is a document that companies send to collect information from the vendor about services rather than products. RFQ only asks for the price, but RFP is a bit more complicated as they ask for more information.
In the RFP, the buyer will attach a few details about the project to see how the vendors will come up with strategies. Since the buyer will reach out to various potential dealers, the buyer will get to see different strategies. The RFP can contain questions about contractors as well.
RFP should be straightforward and precise. Through RFP, the buyer gets to know the vendors’ preferences, and thus the buyer can compare the deals based on not only the price but also on the priorities of the vendors.
RFP can ask for examples of the vendors’ previous works. To be sure and confident, the buyer can ask for details of previous similar projects.
Through RFP, the buyer gets a chance to know about the skills and capabilities of the vendors and then compare those to get the best results.
Main Differences Between RFQ and RFP
- RFQ stands for Request for Quotation, and RFP stands for Request For Proposal.
- RFQ asks for the cost of a particular service or product, and RFP asks for detailed information and even proof about the services.
- RFQ is to get the financial details, whereas RFP is for other details which can help to compare various other vendors, and thus the buyer can choose the best agreement.
- RFQ should be well structured and prescriptive. While writing RFP, the buyer should be very formal and state his/her questions very directly. The buyer needs to ask whatever he/she requires to know about the services.
- RFQ only requires the cost of the whole project in detail, so the vendor can not mislead the buyer with other irrelevant information. On the other hand, RFP lets the buyer get a peek at the capabilities and efficiencies of the vendors.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.