Difference between RFP, RFQ and RFI

The business world is full of Anglo-Saxon terms and acronyms that can lead to confusion and misunderstandings with suppliers and customers. 

Specifically, in the sector of purchases and tenders in public and private companies, there are three acronyms that are often confused between them or used interchangeably, although each of them has its meaning and reason for being. These are the acronyms that we use to make formal requests to suppliers about their products or services: we speak of RFP, RFQ and RFI requests. 

If you are not sure either, in this post you will find the difference between RFP, RFQ and RFI requests. 

RFI: Request for Information or Request for Information

The purpose of a rfp response is to collect general information about a provider's products or services. It is usually used either as a first contact with suppliers in large-scale projects in which it is intended to know the services or products offered by each supplier without yet entering personalized estimates or as the only phase of a small contracting project in the agility in decision-making prevails. 

As we say, the essence of this document is agility, so we should not burden this request with too many requirements if we want a quick answer, although there are some that we consider essential: 

1. Information about the applicant company:

• Explanation about the activity of the company
• Contact details of the person who will manage the process
• Explanation of the needs of the requesting company in relation to the services or products that we believe the supplier offers. 

2. Request for information about the supplier company:

• Services and / or products offered and adaptation to the needs presented
• Provider's experience with similar companies or projects
• Contact details of the person who will handle the account

3. Request to sign a confidentiality agreement if necessary

4. Deadlines for the presentation of the required information and next steps of the project: If the hiring decision is going to be made only with the presentation of the RFI, it is important to indicate the criteria that will be taken into account when making the choice so that the provider can adapt the information it presents. If the project is going to have more phases, it is convenient to make it clear at this time. 

RFQ: Request for Quotation or Budget Request

The objective of an RFQ or Budget Request is to ask different suppliers for the price of a specific service or product. It is used when the applicant company is very clear not only about the need to be covered but also about the solution - product or service - that it wishes to hire. In this case, the supplier is asked to give a budget for a specific product or service, making it easy to compare the proposals presented by the supplier since theoretically they are budgeting for exactly the same thing. 

In this case, the information that an rfp response must contain is:

1. Information about the applicant company:

• Explanation about the activity of the company
• Contact details of the person who will manage the process

2. Specific request on the price of a product or service offered by the supplier company, specifying in detail what this product or service should include.  

3. Request to sign a confidentiality agreement if necessary

4. Deadlines for submitting the budget and next steps for the project:

If the hiring decision is to be made only with the presentation of the RFQ, it is important to indicate the criteria that will be taken into account when deciding. If the RFQ is part of a larger process, it is important to point it out at this point.

RFP: Request for Proposal or Request for Proposal

The objective of an RFP or Request for Proposal is to raise the needs of a company in a specific field, such as telecommunications, to different providers with the aim that they present their best solution to the needs raised and the price of this solution . This is a complex request in which it is necessary to exhaustively detail both the starting point and what is expected to be achieved, not only in economic terms, but also in terms of quality, safety, execution, etc. 

In general terms and without going into much detail, an RFP should contain: 

0. As a step prior to sending the information sheet, the signing of a confidentiality agreement can be requested if necessary.

1. Introduction with information about the applicant company  

2. Objectives of the hiring process. In other words, needs that are expected to be covered by the hiring process.

3. Description of the current situation with as much detail as possible and expected improvements.

4. Details on the execution of the project, if successful

5. Calendar of the phases of the process (presentation of the proposal, decision-making, start-up of the project, etc.)

If you want to know more about what an RFP is and how it should be written, you can visit this post

So what is the difference between an RFI and an RFP?

An RFI is less specific and contains less information than an RFP or an RFQ, but it offers the advantage that it is less complex to prepare and can help us to rule out suppliers from the beginning in large quantity bidding processes if we already see that they do not offer what we want. we are looking for or to carry out a shallow comparison between suppliers if what we want is to quickly contract a small project. 

And the difference between an RFQ and an RFP?

An RFQ focuses on the economic aspect of the proposal, without giving the provider options to offer one service or another depending on the needs raised, since what is proposed is to put a price on a very specific request. An RFP is a broader process in which the needs of the company are detailed and not only a budget is requested, but also more flexibility is given to the supplier to present the best solution to the needs raised. In the resolution of an RFP, more factors come into play apart from the price: quality of the proposal, coverage of all the needs raised, etc.