The Request for Quote (RFQ) process varies from company to company depending on your spend and the amount of staff designated to the procurement function.

If you are lucky enough to have a RFQ Software platform integrated into your computer operating system you are one of the fortunate ones. These companies have software which allow the purchasing department to quickly and easily turn an electronic requisition (request from the user group) into a RFQ and spin it out to three or more vendors for P&D (Price and Delivery) without leaving their chair. Most companies do not have this type of functionality and they in turn expect Buyers to retype, cut and paste, email or fax a hard copy to vendors for a quote. In these instances, much of your potential savings could in turn be chewed up by the labor costs dedicated to requesting the quotes.  There are better ways.

The RFQ is the Buyers way of determining present market costs and conditions for item which are needed to run the organization they work for. Typically they are looking for price, delivery, quality, payment terms and specifications on their needs. Often these needs are dictated by a user group or another department which is looking for product for maintenance, repair or operating (MRO) issues.  This is not the only instance where a RFQ is used, this same user group might be looking at a capital purchase of new equipment or other service related needs. The RFQ is purchasing way of keeping a handle on costs for goods and services.

Having a RFQ template for these different types of purchases will help you expedite the time you spend on acquisition and reducing acquisition costs makes your department more effective and lowers cost.  Let us help…we have many different RFQ type forms and templates in our bundles as well we are an eProcurement or eSourcing software provider by way of our RFQPro Software Platform.

If you subscribe to our mailing you will receive our FREE welcome pack of templates which include a couple of standard RFQ forms along with an invitation to bid letter. They are instantly delivered upon confirmation of your address.  If you want more robust RFQ Templates, we recommend you buy either the Purchasing Manager or Mega Pack Bundle. Both contain many sample RFQ forms which can be quickly modified to meet your specific needs to avoid having to start from scratch.

RFQ67-RequestforQuote RFQ2 Preview AppendixB

The RFP checklist for the Buyer will differ from the checklist a Vendor would use when they are responding to your proposal. The Buyer will focus on the scope of work detail, compliance, selection criteria and commercial pieces. The Vendor may want to include related success stories or work history as part of their response and a third checklist might be one provided by the Buyer which is often called a proposal checklist or a list of items they want to be included in a supplier response. Seasoned Vendors will pay close particular attention to this checklist.

Confused? Let us elaborate – we have the Buyer checklist (1), proposal checklist supplied by buyer for the vendor (2) and last we have the supplier or offeror’s checklist (3).

  1. Buyer checklist: The owner of the RFP will have a checklist which they will use to ensure they have included all necessary components for the document to be considered sound. Some of these necessary components would be a Scope of Work, Technical Requirements, Project Timelines, Budget, Business Requirements, Regulatory and Environmental Requirements, Selection Criteria, Submission Timetable and others.
  2. Proposal checklist: As a buyer or as the owner of the RFP we recommend you include a checklist of deliverables for your suppliers. Bidders will find this beneficial as it will ensure they do not miss providing any of the required information in their bids. Typically this checklist will form part of the owners evaluation matrix and as a vendor you want to make sure there are check marks in these columns. To win your business, be clear as to what you expect them to include with their RFP response. Some items on a proposal checklist might include – Completed Bid Form, Bidder Qualifications, Staff or Project Personnel CV, References, Company Profile, and necessary Insurance Coverage.
  3. Vendor or Offeror checklist: As a Vendor you will have your own checklist of items you will want to include with your RFP response to help you improve your chances at being awarded the bid. Some items on your checklist might include – Did we use the forms provided? Did we respond to all items in the RFP and in any Addenda? Did we follow the format required in the RFP? Who are the contacts? Are there any meetings we are required to attend? Is our insurance and work coverage policies current? Nothing more embarrassing than providing expired documentation. These are just some points to consider.

If you are looking for a sample RFP checklist Read the rest of this entry

Part 2

RFQ TipsThis post is a continuation of Part one of our RFQ Tips segment.

A RFQ is all about the competitive bidding process however competitive bidding is no guarantee of best value for money. It is important to remember attaining quotes from a RFQ is one stage in the procurement process. In this series we are not going to just assume vendors a) want your business b) will compete with other bidders and c) they are going to submit their best offer upfront or the first time, we will provide some talking points to other scenarios.

As a professional Buyer you have to assume this is not always going to be the case. Other factors do play a role in vendors providing the best price upfront or first time they submit. The vendors might be at capacity and are throwing out a price which if you take then they will gladly supply or they might assume you are just testing the market (looking for information) so the vendor may offer a sub-standard price and not their best. Supplier workload might indicate they do not have time to fine tune their quote so they toss out the price they used in the last quote not even considering your volume and last innovation is not factored. Maybe your potential supplier has experience (innovation) you can leverage to drive down costs and improve productivity and without entering into formal negotiations these factors may never surface.

Your goal as a buyer is to make your vendors work hard for your business. It is during the RFQ and subsequent negotiations where you will start to see the benefits and potential cost savers. Competitive bidding is a good place to start however be prepared to incorporate other techniques to achieve your end objectives.

Footnote: Any time you issue a RFQ it is implied legally that you intend on making a purchase. If it is not your intention to make a purchase and for example if you are only looking at budgetary costs, it is a common or standard business courtesy to indicate such.

Part 1

The RFQ or Request for Quotation is also referred to as a Request for Qualifications. Both procurement forms are used by Buyers when they approach Vendors for goods or services in the Quotation instance and in the Qualifications scenario they are looking for specifics to determine whether you as the Supplier might qualify to complete a requirement the Buyer has identified.

The RFQ for Qualifications might be to determine whether you are able to complete special artwork for a public environment like say a public library for example. In this instance, the Buyer might offer the Supplier a small stipend like $500-1000 to create some form of facsimile of what they would provide as artwork for this public space. From the samples of artwork provided by potential bidders the Buyer would then consider an award.

In general, when talking RFQ’s most vendors would assume you are looking for a price quotation for either goods or services. A RFQ is a great way to get the current pulse or cost in the marketplace for the item(s) you seek. By issuing a RFQ, the vendor understands they have a shot at winning your purchase order or supply contract so they are often motivated to provide the best terms in an effort to gain your business. Not a guarantee however it is an assumption…read on. Read the rest of this entry

Bid ProceduresHow you are governed in respect to bid procedures for any RFQ, Tender or RFP you issue will vary depending on whose dollars you are spending. If you are a purchasing professional working for a public organization and spending tax payer dollars, you are likely using a different set of guidelines then a buyer representing a privately owned organization. Each private or independently owned company’s bid procedures might differ depending on their size and spend.

In addition to their bid list, public purchasing agencies are often mandated by statute or regulation to advertise their bids in local newspapers  whereas private corporations usually draw bidders from an internal bid list only.

In a formal bid system, regardless of ownership structure or bidding guidelines, the bidder typically will be provided:

  1. Instructions to bidders – explains how, when, and where the response to the bid must be submitted;
  2. Specifications – a detailed specification which the item required must meet. This is often technical by nature and the RFQ might include pages of quality guidelines, engineering drawings and strict compliance requirements;
  3. Conditions – a set of legal, special and general conditions which must be met by the successful bidder;
  4. Bid Form – which your bidders will use to provide their cost and any other commercial terms.

For the opening and award component of your tender, this again will vary for the public purchaser when you compare practices to the private or corporate purchaser. The public purchaser is often required to open all bids in a public arena and will be required to disclose bid sums. Basically, they open the tender in front of anyone in attendance and post the sum to a white board. Many of the bidders will take part in the process just to see competitors bids. The private buyer is not required to follow this process and often has more flexibility when it comes to evaluating and awarding the bid.

The public buyer will have to justify and defend a selection if the lowest bidder is not awarded the tender. If the bidder meets all the criteria posted in the tender, RFP or RFQ and they are low bid often this is all that is required to be awarded the contract. For the selection criteria, more weight is put on unit cost whereas a private company might put more emphasis on service, warranty and quality.The public purchaser is under more scrutiny and the award process is much more transparent.

All out-going procurement documentation along with the bidding procedures are typically managed by the purchasing department. They are the keepers of the bid list or vendors in good standing, the issue and closing date of the bid and all other commercial aspects of the bid.

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