No matter what type of business you have, you will need to find and cultivate strong relationships with suppliers and manufacturers in order to meet your customers’ requirements and grow your business.
If you need a product or service from a supplier, you may come across the terms RFI, RFQ, RFT, and RFP. These are short for Request for Information, Request for Quotes, Request for Tender, and Request for Proposal.
The acronyms represent processes that are standard among sourcing and procurement specialists. If you are an owner of an SME, this article will provide the information you need to understand what each process involves and which one you should use depending on the type of project you need to engage suppliers or partners for, and what you want to achieve.
What is a Request for Information (RFI)?
A Request for Information (RFI) is a request for mostly basic information from a supplier and is sent before an RFQ. You may want to send an RFI to several suppliers so you can compare how each one operates and their individual market experience.
An RFI can inform you regarding:
- The size of a potential supplier’s operation
- How many employees, production lines, and units they have/can produce
- The type of products they have or can manufacture
- If they can deliver to your location
When composing an RFI, you should include the following:
- Table of contents
- Introduction to your business
- Reason for writing the RFI
- The type of product and the volume you require
- Response instructions/guidelines and templates
- Any applicable deadlines
An RFI will put you in a solid position to be able to shortlist potential suppliers and send detailed RFQ, RFT, or RFPs.
What is a Request for Quotation (RFQ)?
A Request for Quotation (RFQ) is the most common type of request and is simply the process of reaching out to a supplier to find out how much they will charge to fulfil your order/s.
To ensure you receive an accurate quote, your RFQ documentation must include a detailed specifications sheet (product spec sheet). A good product spec sheet contains:
- A brief product summary
- The product specifications
- The desired materials to be used
- The desired packaging
- Diagrams and graphics
Drawings and photos will be especially important if you are using an overseas-based manufacturer.
It is also a good idea to include a draft contract in the RFQ so any negotiations can take place early on in the process. Furthermore, if there are terms and conditions that cannot be accepted by a potential supplier, you will be able to eliminate them as a possibility early on in the process.
What is a Request for Tender (RFT)?
A Request for Tender (RFT) is mostly used in the public sector, however, they are not unknown in the private sector. If you are sending out an RFT you will have exceptionally well-defined specifications for your project.
According to CIPS (the Chartered Institute of Procurement and Supply), the main objective of the tendering process is to:
“ensure the “best fit” supplier is selected to supply goods and/or services to the customer which offers the best value for money. Such a supplier is likely to be sound commercially, technically competent, financially sound, and perceived as best for the task.”
Unlike public sector tenders, private sector tenders are not subject to requirements such as having to make the opportunity public or follow particular tender request formulas. It is worth examining some of the requirements the public sector must abide by, such as examining the financial stability of tender applicants to ensure you select the best supplier or manufacturer for your project.
Tip: Use the UK government's contract finder tool to see what government agencies currently have procurement opportunities available to potential bidders.
What is a Request for Proposal (RFP)?
A Request for Proposal (RFP) is similar to an RFQ, however, an RFP process allows the supplier or manufacturer to contribute their expert opinion on how the product will be designed and/or created. You can be deliberately vague with an RFP, providing space for the respondent to provide their thoughts on how best to design and deliver what you want.
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RFI, RFQ, RFT, and RFPs are vehicles that will provide you with the information you need to find a supplier, manufacturer, or partner to ensure your SME meets a particular project’s objectives.
Whatever type of request you make, cement a good impression by being polite and professional during the selection process. The relationship you develop with your chosen supplier or manufacturer is likely to have a significant impact on your project’s success.
To find out more about RFI, RFQ, RFT, and RFPs, contact our commercial law solicitors for a free 15 minute consultation. Just click ‘Get started’ below.