Request for Quote (RFQ)
Key Facts
Alternate names: invitation to quote (ITQ), price inquiry, bid request
Typical triggers: new project materials, one-off equipment purchases, commodity re-bids, spot buys above a dollar threshold
Core contents: detailed specifications or bill of materials (BOM), quantity, delivery terms, service-level requirements, response deadline, evaluation criteria
Stakeholders: requestor, sourcing/procurement team, finance/budget owner, potential suppliers, legal/compliance
Why It Matters
Drives price transparency – Multiple quotes on identical specs surface true market rates and prevent over-budget buys.
Supports objective supplier selection – A scored comparison of price, lead time, and terms keeps sourcing decisions defensible and audit-ready.
Reduces negotiation cycles – Suppliers respond to a single, unambiguous spec, cutting back-and-forth emails and accelerating time-to-PO.
Real-World Examples
Electronics Manufacturer
Issues an RFQ for 50,000 custom PCBs. A side-by-side comparison of tooling charges, unit cost at three volume breaks, and IPC quality certifications saves 12 % versus last year’s contract.
Municipal Transit Authority
Uses an e-sourcing portal to gather bids for bus shelters. Automated scoring (price 60 %, warranty 20 %, ESG rating 20 %) ranks vendors and generates an audit trail that withstands public-records requests.
Related Terms
Request for Proposal (RFP)
Request for Information (RFI)
Competitive Bidding
Source-to-Contract (S2C)
Frequently Asked Questions
Q: How is an RFQ different from an RFP?
A: An RFQ seeks firm prices for well-defined items; an RFP invites broader solutions and may weigh methodology, innovation, or service model in addition to cost.
Q: When should I skip an RFQ and negotiate directly?
A: Spot buys below a low value threshold, sole-source items, or emergency purchases may justify direct negotiation—provided policy allows it and justification is documented.
Q: What evaluation criteria belong in an RFQ?
A: Price, delivery lead time, payment terms, warranty, quality certifications, and ESG or diversity scores are common. Weight each factor up front to keep the award decision objective.
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