What Is a Request for Quote (RFQ)?
Any business that needs to buy products or materials will inevitably run into the term request for quote (RFQ). But does anyone know what that actually means?
This section will help you use and RFQ effectively in the buying process, and avoid using it at the wrong stage of the procurement process.
A request for quote (RFQ) is a business process that a company will use when buying a specific product or services. Generally, the business will issue an RFQ and allow vendors to offer price quotes. The business will then choose the lowest bid and sign a contract with the vendor.
An RFQ allows vendors to submit bids for how much they will charge for the specific product or service the business is seeking. RFQs allow businesses to choose the right suppliers at the right price. It includes:
• Specifications for the product you are buying, including order quantities.
• Itemize costs from the vendor to compare bids.
• A deadline for submitting bids.
• A timetable for the delivery of the product or service.
Standardization within the RFQ formatting allows for businesses to quickly and effectively compare bids across numerous vendors.
An RFQ is a quote and not an offer or contract. A business cannot use an RFQ as a formal agreement. Once you accept the quote and the vendor approves, you can create and send the final contract.