A request for quotation (RFQ) is an invitation to submit bids, usually sent to several potential suppliers, asking for firm pricing on relatively standard or commodity-type products or services. Such solicitations for competitive bidding usually require respondents to provide more than just estimated costs. Organizations initiating a request for quotation typically provide detailed specifications for the subject item and ask bidders to confirm that their product or service meets or exceeds everything specified. Requestors normally also require commitments on delivery dates, payment terms, quality assurance, and length of time that the quoted price will be in effect. There is virtually always a deadline for submitting an RFQ document.
The request for quotation process benefits both the requesting and bidding organizations. Requesting companies enhance their purchasing power by giving themselves the opportunity to negotiate with multiple vendor candidates. They also increase their probability of receiving the best price because vendors all know they are in a bidding game and are likely to offer highly competitive pricing. Potential suppliers typically appreciate the opportunity to compete for business on a level playing field.
Generally, the Internet abounds with models for developing effective RFQs and RFQ responses. Entering terms like "request for quotation" or "RFQ" followed by additional words like "example," "sample," "response," or "response example" in an Internet search engine should display a wide range of examples to review. Standardized templates for both developing and responding to a request for quotation are also available online, usually at a modest price. Internet searchers can easily find them by adding "template" or "templates" to whatever they are searching to help narrow the search.
The request for quotation is one of four "request for" documents frequently used in the business purchasing process. Two others are also used for competitive bidding — the request for proposal (RFP) and the request for tender (RFT). RFPs, the closest relatives to RFQs, are usually issued for rather complex products or services and require that a price quotation be supplemented with a written proposal detailing how the product or service will fulfill the organization's specific needs. The RFT is an announcement by a government agency of bidding that is open to all vendors for specifically defined products or services. The fourth document in the "request for" category is the request for information (RFI) — a document that does not ask for bids but rather seeks only information on prospective vendors to qualify them for inclusion on RFQ or RFP bid lists, or to alert them that they may be receiving an RFQ or RFP.
