RFI, RFQ, RFP…What’s the Difference?
As a supplier, you’ve probably seen requests for information, quotations, or proposals during the process of trying to gain business with corporations and government organizations. All three have some features in common, but each have their own distinct qualifications, and understanding those distinctions will help you in your efforts to secure bid opportunities.
Procurement, or the act of buying goods and services, is streamlined through RFI, RFP and RFQ processes.
Here’s a simple breakdown of the acronyms:
When a buying organization disseminates a Request for Information (RFI), they are seeking general information about prospective suppliers’ capabilities and services/goods. The next phase in the procurement process, involves either a Request for Quotation (RFQ), or a Request for Proposal (RFP). When a company distributes an RFQ, they are simply asking for suppliers’ pricing on the requested services. An RFP, on the other hand, is a request for a comprehensive overview of suppliers’ company background, detailed descriptions of the requested products/services, and often times the completion of a specific questionnaire required for submission.
As a small or early-stage business, having the following eight (8) items on-hand and up-to- date will accelerate the tedious yet vital procurement process to winning a contract:
1. Professional Cover Page
First impressions are everything – be sure to design a professional and clean cover page that accurately reflects your company’s identity. This should represent of your company’s brand, the title of the requested service or product, and the proposal date.
2. Table of Contents
Provide your audience with an understandable and easy-to- read overview to reference the sections they’re most interested in. If possible, number the sections according to the information requested by the buying organization.
3. Company Background and Overview
Let’s face it, without this component the procurement team will have no idea who or what your company is about. A cover letter and executive summary are also appreciated elements during the bid process.
4. Comprehensive Product Descriptions
An all-inclusive, detailed overview of the requested product or service should completely exhaust any questions the prospective buyer may have. Be organized in your approach and break down your paragraphs into digestible sections with bolded or italicized headings.
5. Implementation Plan
The implementation plan includes your company’s step-by- step timeline for new client onboarding. The plan should include a timeline overview in order for your prospective client to schedule accordingly with their own team.
6. Financial Review
Be prepared to detail up to two (2) to three (3) years of your company’s financial information. To avoid the headache, be proactive and make sure your company’s financial review is up-to- date for the past 2-3 years.
Before entering the RFP, RFQ or RFI submittal process, it’s wise to have three-four client referrals or testimonials on-hand. Choose wisely: these referrals should have a positive experience doing business with your company.
8. Pricing Outline
Having a standard pricing sheet for all of your products/services will make your life way easier when the RFIs, RFQs and RFPs start rolling in.