Request for Quote - Definition
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Accounting, Taxation, and Reporting
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Marketing, Advertising, Sales & PR
- Business Management & Operations
- Economics, Finance, & Analytics
- Professionalism & Career Development
What is a Request for Quote (RFQ)?
Request for Quote is a document issued by an organization or a company inviting suppliers or vendors to bid for supplying a specific product or service. When a company needs to procure some product or service from outside suppliers, it issues a Request for Quote and sends it out to the potential suppliers eliciting quotation for a product or service. A Request for Quote is also known as Calls for Bid or Invitation for Bid.
A Little More on What is a Request for Quotation
The soliciting company, having a clear idea about the specifications and amount of the products or services needed, issues an RFQ inviting the quotes from the suppliers. It enables them to compare the rates provided by different bidders and select the best one. As the desired products or services are standardized and uniform, it becomes easy for the company to compare the quotations received from different suppliers. Suppose a media house needs 50 cameras with some particular specifications. They will send out a Request for Quotes to different chosen vendors. The vendors will bid with their proposed quotations. As the quantity of the camera and its specifications are fixed, it is very easy for the media house to compare the quotes received from different bidders. A Request for Quote includes the specification of the required products or services, payment terms, bid submission deadline and other information needed for a successful bidding. It may also mention the selection criteria the company follows while awarding the contract. Generally, there are four phases of bidding.
- Preparation phase - This is when the Request for Quote is drafted.
- Processing phase - This includes sending out the RFQ and receiving the quotes,
- Awarding phase - This is when a bidder is selected and the offer is awarded.
- Closing phase - This is when the contract is finalized and bidding is closed.
The contract is generally awarded to the bidder who meets the minimum qualifying criteria and proposes the lowest quote. At times, companies send Requests for Quote as an attachment to the Request for Proposals. Requests for Proposal generally include the cost of performing an entire job or function. Request for Quotes are not announced in public, the soliciting company sends it out to their preferred vendors or suppliers. This is sent to only those vendors whom the soliciting company trusts for the product or service. It reduces the time of the selection process and procurement. Request for Quotes streamlines the process of procuring a product or service from outside sources. This strategy is effective when the company knows exactly what they are looking for and who are the best vendors providing that service or product.
Academic Research on Request for Quotation
- Methodologies for providing rapid and effective response to request for quotation(RFQ) of mass customization products., Wongvasu, N. (2002). This paper discusses a new technique for processing requests for quotation (RFQs) and also describes the methodologies for rapid and accurate estimation of manufacturing cost for modified standard products as well as custom made products. The paper also reviews the insights gained through industry collaboration on the development of rapid cost estimation systems.
- Request for Quotation, TO, R. Q. (2017). This article explains a request for quotation as a process of inviting various suppliers to a bidding procedure to bid on a variety of products or services. It states that the RFQs contain the specifications of the kind of items or services required. When the specs are exact and accurate, the quote also becomes more accurate and can be compared to the other suppliers.
- Request for Quotation, Payne, O. (2011). This paper details the steps required to make a purchase. It states that the steps depend on what one wants to purchase and how much one anticipates the cost to be. It says that for large and complex purchases or projects which involve a considerable amount of money, the requests for quotation are generally required. A specification of the requirements is contained in the proposal.
- REQUEST FOR QUOTATION, GOMEZ, L. A., & QUIZON JR, E. M. N. (2017). Carbon,3, 4. This article explains the meaning and workings of a request for quotation. It uses as an example a request for proposal posted by the City of San Fernando some time back. The proposal is for the supply and delivery of meals that are to be served for the working committee and barangay tanods as well as staff during the Inter-Barangay Basketball Tournament.
- Request for Quotation (RFQ), AN, T., & OFFER, A. A. (2012). This paper presents a request for quotation that was presented by Bengaluru International Airport for the development of a second runway, terminal 2 building as wells as other accompanying developments that would enable it to meet the increasing demand and also keep excellent service criteria by ensuring a passenger-friendly airport.
- Request for Quotation Invitation, Rhee, J. L., & Officer, C. P. This is a case study of a request for quotation presented by the department of procurement services in the City of Chicago that encourages interested parties willing to do business with the city to respond. The quotation request requires a contractor who will furnish and deliver Multi-Band pane airborne transceivers as well as all the associated accessories necessary for their installation.
- REQUEST FOR QUOTATION (RFQ), MABENA, B. (2018). This paper presents a request for quotation presented by the Passenger Rail Agency of South Africa for the repair of axle counter cards for Metrorail KZN. It also displays the formula that the evaluation of price will be based on. The paper also presents the various qualifications and documents that the agency requires the bidders to have.
- Request For Quotation for Supply of Toners, Mall, N. H. (2015). This article presents an RFQ by the National Payments Corporation of India which is a registered company with offices in Mumbai. This company offers a proposal to purchase genuine original toners to utilize at various NPCI locations. It also presents the requirements regarding the specifications, costs, due diligence among others that the bidders should fulfill.'
- REQUEST FOR QUOTATION FOR GOODS AND SERVICES FOR THE CITY OF JOHANNESBURG, FROM, S. W. B. R., & SUPPLIERS, S. (2018). This paper provides a request for quotation by the City of Johannesburg for the provision of goods and services. It stipulates the requirements and the necessary documents that should also be submitted. It also presents the estimated prices of the commodities and the quality expected and warns of disqualifying the bidders who fail to meet the requirements.
- Competitive Selection of Domestic Library Booksellers: Developing a Request for Quotation, McCabe, G. B. (1988).The Smaller Academic Library: A Management Handbook, 313. This paper states that a request for quotation is fundamental and it helps in forming a successful partnership between a contract manufacturer and a product developer. It indicates that an RFQ is the first point of communication with potential suppliers for a business to express its expectations for a job.
- Strategic Benefit of Request for Quotation, Chu, L. Y., Rong, Y., & Zheng, H. (2018). This research investigates how a buyer can achieve cost reduction through the combination of a procurement process with exclusion clauses, although these clauses are usually adopted in contracting but seldom used. It analyzes the equilibrium results of when the buyer simultaneously negotiates with imperfectly exchangeable suppliers while utilizing a dual-sourcing setting.