A request for quotation (RFQ) is a company's document to request pricing and packaging information from a potential supplier. Depending on the level of specificity in the RFQ, this may include everything from pricing and contact information to timeline and project expectations. An RFQ template makes it easy for you to standardize this request. That way, your team has the exact information you need to make an educated decision on which supplier to move forward with. In this article, learn the six steps to creating a request for quotation and get started easily.
Do you ever find yourself overwhelmed with the process of finding the right vendor for your project? If you’re looking to set yourself up for success, streamline the process, and stay under budget, then you may want to start with a request for quotation (RFQ) document.
In this guide, we’ll cover what an RFQ is, the steps you need to follow, and what to include in your document. We’ve even included an RFQ template to make getting started easier.
A request for quotation (RFQ) is a document that businesses send to potential suppliers in order to learn more about their pricing information. This standardized form helps companies sort through bids more effectively because its objectivity makes it easier to compare and contrast vendors. You can send RFQ documents either before or with your request for proposal (RFP).
Typically, a company will tailor the RFQ they send out in order to receive the specific information they need to review before they can move forward with a potential vendor. Customize your document to include the most important details for your vendor, including pricing expectations, submission details, and more.Free RFQ template
While there is some overlap between the two, there are several distinct differences between RFQ and RFP documents. An RFQ mostly looks for the lowest price between vendors.
RFP stands for request for proposal. An RFP takes additional factors into consideration and asks a series of questions to evaluate the best option. In particular, request for proposal documents include questions about risk management, competitor analysis, deal-breakers, and more.Read: Tips for creating a request for information (RFI) document and template
A statement of work is a document that outlines what needs to happen to have a successful project. A scope of work is a section of this document that explains the steps needed to accomplish their goals.
A statement of work is typically sent prior to the RFQ document in order to establish the steps that need to happen in order to have a successful project. Once you understand your contractor’s roadmap for completing their tasks, the next step is to review pricing information via the RFQ document.Read: Scope of Work vs. Statement of Work: What is the difference?
Businesses that are in the process of buying a good or service should send an RFQ document to vendors they are considering using for their projects. Vendors will send this document back to outline their pricing, so you can compare their costs against other potential suppliers. Getting these results is an important step in the procurement management of a project.
An RFQ template is sent after you’ve given a potential vendor a document outlining your goals, budget, and timeline for your upcoming project. Having an RFQ and project details will help your bidding suppliers to understand the project scope and let them decide if they want to put their hat in the running.
Once you’ve sent your scope of work and statement of work at the beginning of your vetting process to your vendors, it’s time to issue your RFQ template to all parties. We’ve included the six main steps in creating an RFQ document below to help you get started on your next project.
First things first: Set your project budget. Your project budget is your detailed plan and timeline of how much money you’ll spend and what you’ll spend it on.
It’s critical that you get your budget in place before you create your RFQ document so you have a basis for evaluating your potential vendors. Having this information in place at the start will help you set your project up for financial success and give you a clear path to choosing the correct supplier.
In addition to setting the budget before filling out your RFQ template, it’s necessary to identify your requirements beforehand as well. Knowing what qualities are most important will help you filter down the list of vendors who are qualified to work on your project.
Below are some examples of requirements that might be important to include in your RFQ document:
Quantity of materials needed
RFQ review process
Terms and conditions
Your requirements will change depending on the type of project you are working on and can be customized to meet your needs.Free RFQ template
Now that you’ve done your prep work, it’s time to prepare the document. The more details you include in your RFQ, the better. Including the details is important because it gives the potential vendor more information about the timeline and scope of the project. As a result, they'll be more able to accurately share their pricing for this particular work.
Here are some factors to consider when preparing your RFQ template:
Project goals: Writing out a concise description of the project and its objectives is important for an RFQ document. The more details you provide, the better a supplier can give an accurate quote for the desired work.
Timeline: Providing a project timeline will allow vendors to know if they can match your project expectations. Try to be realistic with your timeline so the vendors have time to collect the supplies and manpower needed to finish the job.
Pricing expectations: Make sure to ask potential vendors to give a full breakdown of their cost method. Specify the level of detail you want from them, like the cost of labor, supplies, and additional fees in their total cost summary.
Submission details: Include the submission timeline and how to send back the RFQ. Adding this information to your document will help ensure bidders don’t miss the deadline.
Contact information: This might seem like a trivial step, but it’s an important one—after all, applicants won’t be able to contact you back if you don’t include your business’s contact information.
Having a document that clearly outlines your requirements will help you mitigate potential misunderstandings. It will also help you get more accurate responses and pricing quotes.
Next, it’s time to send the request for quotation to your list of vendors. Reread your final document one last time before sending it. This will give you a final opportunity to make sure your RFQ includes the necessary information.
Be sure to give your vendors several weeks to respond so they have enough time to work with their team on pricing. Typically, giving 3–4 weeks allows plenty of time for suppliers to ask questions and have an understanding of the project deliverables. Always keep bidding information confidential.
Reviewing submitted RFQs should be quick and straightforward now that you’ve done the prep work for vetting vendors. Using this method will help you evaluate each vendor to see which ones meet all of your requirements for the lowest cost.
Now that you have all of your requests for quotations back from vendors, it’s time to make your selection. Using a consistent RFQ template makes it easy to compare vendors quickly and easily. Read through each submission carefully to make sure your selected contractor’s terms and pricing match your expectations.
Check out our RFQ template below to make finding the perfect vendor more simple. When giving an RFQ document to a potential supplier, your company would fill out the project details and they would fill out the pricing breakdown and company information.
Below, you’ll find a sample of what a request for quotation document would look like completely filled out by a vendor when planning an event, but feel free to customize the template to fit your needs.
A clear and concise RFQ template will help your workflow and provide clarity between you and your potential vendors. An RFQ document will help you get the product or service you’re looking for at the lowest price. Once you have an RFQ, try Asana’s project management tool to help streamline your next task and keep it on track.Free RFQ template