Free RFQ template: 6 steps + vendor evaluation tips

Finding the right vendor for your project doesn't have to be overwhelming. With a well-structured request for quotation (RFQ) document, you can streamline your procurement process, compare suppliers more effectively, and stay within budget.

In this guide, we'll cover what an RFQ is, when to use one, the steps you need to follow, and common mistakes to avoid. We've also included an RFQ template to help you get started.

What is an RFQ?

A request for quotation (RFQ) is a document businesses send to potential suppliers to request pricing for specific goods or services. This standardized form makes it easier to objectively sort through bids.

Typically, a company will tailor the RFQ they send out to receive the specific information they need to review before moving forward with a potential vendor. Customize your document to include the most important details for your vendor, including pricing expectations, submission details, and more.

What's the difference between an RFQ and an RFP?

While RFQs and RFPs are both procurement documents, they serve different purposes:

When to send an RFQ

Send an RFQ after you've shared your project goals, budget, and timeline with potential vendors. This is a key step in procurement management.

An RFQ is the right choice when:

• You know exactly what you need: Your specifications are clear, and you're comparing prices for a defined product or service.

• Price is the deciding factor: You want to find the lowest cost among qualified vendors.

• You're sourcing standard goods: The products or services are readily available and don't require custom solutions.

• You need to compare multiple suppliers: You want an objective way to evaluate bids side by side.

What are the steps to complete an RFQ?

After sending your scope of work and statement of work to potential vendors, it's time to issue your RFQ. Follow these six steps to create an effective RFQ document.

1. Set your project budget

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 creating 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 provide a clear path to choosing the right supplier.

2. Identify your requirements

In addition to setting the budget before filling out your RFQ template, you also need to identify your requirements beforehand. Effective requirements management ensures vendors receive clear, complete specifications. Knowing which qualities are most important will help you filter the list of qualified vendors for your project.

Below are some examples of requirements that might be important to include in your RFQ document:

• Quantity of materials needed

• Delivery requirements

• RFQ review process

• Terms and conditions

• Payment parameters

Your requirements will vary depending on the type of project you are working on, and they can be customized to meet your needs.

3. Prepare the document

Now that you've done your prep work, it's time to prepare the document. The more details you include about timeline and scope, the more accurate your vendor quotes will be.

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 more accurately a supplier can quote the desired work.

• Timeline: Providing a project timeline helps vendors determine whether they can meet 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, such as 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 important. Applicants won't be able to contact you back if you don't include your business's contact information.

A well-documented RFQ reduces misunderstandings and leads to more accurate pricing quotes.

4. Send the request

Next, send the request for quotation to your list of vendors. Reread your final document one last time before sending it to ensure your RFQ includes all 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.

5. Review the completed RFQ

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 determine which meets all your requirements at the lowest cost.

6. Select your vendors

Now that you have all your vendor quotations back, it's time to make your selection. Using a consistent RFQ template makes it easy to quickly compare vendors. Read each submission carefully to ensure your selected contractor's terms and pricing match your expectations.

Common RFQ mistakes to avoid

Even well-intentioned RFQs can fall short. Here are the pitfalls to avoid:

• Vague or incomplete specifications: When your RFQ lacks clear details about what you need, vendors have to make assumptions. This leads to inaccurate quotes and wasted time for everyone involved.

• Unrealistic timelines: Asking for quotes too quickly or setting project deadlines that don't account for production and delivery realities will limit your vendor pool. Give suppliers adequate time to prepare thoughtful, accurate responses.

• Failing to define quantities: Suppliers need to know exact volumes to provide accurate pricing. Without clear quantity information, you may receive quotes that don't reflect actual costs at scale.

• Inconsistent formatting across RFQs: If you send different formats to different vendors, comparing responses becomes difficult. Use a standardized template for every RFQ to make evaluation straightforward.

• Focusing only on price: While cost is important, the lowest quote isn't always the best value. Consider factors like delivery reliability, quality track record, and payment terms when evaluating responses.

• Poor revision control: Sending outdated specifications or making changes without notifying all vendors creates confusion and leads to mismatched quotes. Keep your documentation up to date and communicate updates clearly.

Avoiding these mistakes sets the foundation for accurate quotes and productive vendor relationships.

RFQ template and example

Check out our RFQ template below to make finding the perfect vendor simpler. 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, fully completed by a vendor when planning an event. Feel free to customize the template to fit your needs.

Streamline vendor management with Asana

Once you've selected your vendor, the real work begins. Asana's work management platform helps you track project progress, manage vendor communications, and keep everyone aligned on timelines and deliverables. Get started today to bring your procurement process and project execution together in one place.

Frequently asked questions about RFQ templates