Different names, units, currencies, payment terms and delivery dates can turn an apparently cheap quote into the more expensive or risky choice.
What does RFQ mean?
RFQ stands for request for quotation. A buying team sends it to several suppliers when it already knows what it needs and the main question is price and terms. The request fixes the items, specifications, quantities, delivery date and preferred payment terms.
Two related terms often come up alongside it:
- RFI (request for information): sent before the need is fully defined, to learn about the market and possible suppliers.
- RFP (request for proposal): used when the supplier is expected to propose an approach, for example for services or projects.
How does the RFQ process work?
- Define the need: line items, quantities, technical requirements, delivery date.
- Select suppliers and send the request with a response deadline.
- Answer supplier questions and share the answers with every bidder.
- Collect the quotes by the deadline and check that each one covers every line item.
- Make the quotes comparable and evaluate them. Most mistakes happen here, because each quote uses its own product names, units, currencies and terms.
- Negotiate, award the order and document the decision.
The checklist below covers step 5.
Normalize line items first
Product names, units, volume breaks and alternatives map to a shared RFQ line while preserving the original source.
Include commercial terms
Currency, payment, freight, minimum quantity and delivery must be compared alongside unit price.
- Price and exchange-rate date
- Lead time and requested date
- Payment and shipping terms
Make deviations explicit
Missing, alternative or technically unclear lines remain open decisions instead of being silently scored.
RFQ comparison fields
- Item, specification, quantity and unit
- Price, currency, discount and additional cost
- Delivery, payment and validity
- Missing lines, alternatives and technical approvals
Example of a traceable award recommendation
Quote B has the lower normalized total and earlier delivery. Two alternatives remain open, so the recommendation requests technical approval before award rather than selecting the supplier automatically.
Frequently asked questions
- Why is a spreadsheet price comparison often insufficient?
- Units, currencies, missing lines and commercial terms frequently need manual interpretation, creating errors or non-comparable totals.
- Should software select the supplier automatically?
- It should provide a justified assessment and expose open deviations. Technical and strategic approvals remain with accountable people.
- What is the difference between an RFQ and an RFP?
- An RFQ asks for a price on something you have already specified. An RFP asks suppliers to propose how they would solve a problem, so it is used when the solution itself is still open.
- Is a quotation the same as a quote?
- Yes. A quotation is the supplier's formal answer to an RFQ, and in procurement the two words are used interchangeably.