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What is an RFP, RFI, RFQ, or RFx?

What is an RFP, RFI, RFQ, or RFx?

For companies operating in complex industries, navigating complicated procurement processes is an operational necessity. Nonetheless, procurement is a field awash in technical jargon that can make it difficult for outsiders to understand what is being asked of them. In particular, organizations tend to use shorthand to refer to opportunities they have put out to the market for open, competitive bids. In this post, we break down the most common terms that organizations use to describe their calls for proposals and detail the differences between them.

RFI vs. RFP vs. RFQ vs. RFx

RFI – Request for Information

A Request for Information (RFI) is a precursor to a Request for Proposal (RFP). Entities issue RFIs to help them understand the range of capabilities of likely submitters and solicit feedback on how they should write and evaluate their upcoming RFP. Because an RFI usually doesn’t lead directly to a purchasing decision, responses are often more informal than they would be with an RFP.

RFP – Request for Proposal

A Request for Proposal (RFP) is a formal request for business proposals that typically leads to a purchasing decision. RFPs generally include business, technical, and functional requirements that must be satisfied to qualify for consideration. In addition, RFPs usually include explicit evaluation criteria by which an evaluation committee will decide the winner of the solicitation.

Because RFPs lead directly to purchasing decisions, most high-performing companies invest significant resources into professional proposal response teams that help them qualify proposal opportunities, focus their time on the strongest opportunities, perfect their proposal content and positioning, and debrief lost opportunities for continual improvement.

RFQ – Request for Quote OR Request for Qualification

A Request for Quote is a request for a quote or a cost proposal. Requests for Quotes are most frequently decided based on the lowest cost proposal that meets the stated requirements. As a result, Request for Quote strategy is often more about getting the cost and offering right.

Additionally, RFQ can also stand for “Request for Qualifications.” A Request for Qualifications is often used as a step to pre-qualify vendors for an RFP or to compile a list of eligible vendors from whom the issuer can procure services. Requests for Qualifications typically ask about vendors’ backgrounds, experience, staff expertise, and/or customer references.

RFx – Requests for Information, Proposals, and Quotes

RFx is an umbrella term that refers to RFIs, RFPs, and RFQs.

What to Know Before You Respond

Now that you know the basic types of procurement requests organizations will use to solicit proposals and bids from vendors, you might feel ready to start putting together some proposals and trying to win business. However, we urge caution when responding to RFx. Why?

Well, the first thing to know about RFx is that they are almost impossible to win without a prior relationship with the prospect and referenceable customers of similar scope and size. The second thing to know is they are time-consuming and costly. The average RFx consumes over 24 hours of labor and involves over nine team members – and that’s just for companies with formal RFx response processes! Companies without formal processes tend to spend even longer on RFx responses. In short, every RFx to which your company chooses to respond necessarily means valuable time that won’t be spent on other key initiatives or deals.

For this reason, companies must remain disciplined when it comes to RFx. In particular, companies should understand how to intelligently source bid and proposal opportunities, qualify the opportunities with data, and how to launch efficient and effective proposal responses if necessary.

In our new eBook, How to Start With Proposals When You Don’t Know Where to Start, we present a high-level overview of how to find, quality, and respond to RFPs, RFIs, and RFQs. Intended for companies launching a proposal response function or seeking to understand why they aren’t winning more competitive solicitations, this eBook covers everything you need to know to establish a successful proposal function.

Download Proposals 101: How to Start with Proposals When You Don’t Know Where to Start to learn more

  • The proposal terms you need to know

  • How proposals should fit in your company’s growth strategy

  • How to find and qualify proposal opportunities

  • Essential proposal management tools to satisfy compliance

  • The top five proposal pitfalls to avoid